Expansionary monetary policy occurs when: a. Congress and the president decrease taxes in an effort to stimulate the economy. b. Congress and the president increase taxes in an effort to stimulate the economy. c. a central bank acts to increase the money supply in an effort to stimulate the economy. d. a central bank acts to decrease the money supply in an effort to stimulate the economy. e. a central bank acts to increase government spending in an effort to stimulate the economy.

Question

Andrew Chen

Business

4 July, 12:46

Expansionary monetary policy occurs when: a. Congress and the president decrease taxes in an effort to stimulate the economy. b. Congress and the president increase taxes in an effort to stimulate the economy. c. a central bank acts to increase the money supply in an effort to stimulate the economy. d. a central bank acts to decrease the money supply in an effort to stimulate the economy. e. a central bank acts to increase government spending in an effort to stimulate the economy.

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Answers (1)

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Tessa Quinn · Answer 1

a central bank acts to increase the money supply in an effort to stimulate the economy.

Answer: Option C.

Explanation:

Expansionary policy is a type of monetary policy that is used by the central government of a country which is used to regulate the money supply in the economy by the central government.

In this expansionary policy, steps and measures are taken by the central government to increase the supply of money in the economy so that people spend some money in the economy and the demand increases and there is growth in the economy.