which of the following is an example of an expansionary monetary policy? course hero

Which of the following is an example of an expansionary monetary policy?

Which of the following is an example of expansionary monetary policy? The Fed increasing the money supply to push interest rates lower.

Which measure is an example of expansionary fiscal policy?

The two major examples of expansionary fiscal policy are tax cuts and increased government spending. Both of these policies are intended to increase aggregate demand while contributing to deficits or drawing down budget surpluses.

How will an expansionary monetary policy affect the GDP when the economy is at less?

Expansionary monetary policy will reduce interest rates and shift aggregate demand to the right from AD0 to AD1, leading to the new equilibrium (E1) at the potential GDP level of output with a relatively small rise in the price level.

What is expansionary fiscal policy?

Expansionary fiscal policy—an increase in government spending, a decrease in tax revenue, or a combination of the two—is expected to spur economic activity, whereas contractionary fiscal policy—a decrease in government spending, an increase in tax revenue, or a combination of the two—is expected to slow economic ...

Which of the following describes an expansionary monetary policy?

Expansionary monetary policy is when a central bank uses its tools to stimulate the economy. That increases the money supply, lowers interest rates, and increases demand. It boosts economic growth. It lowers the value of the currency, thereby decreasing the exchange rate.

Which of the following is an expansionary fiscal policy quizlet?

Which of the following is an expansionary fiscal policy? FEEDBACK: Expansionary fiscal policy is aimed at stimulating the economy toward expansion. This can be achieved by increasing government spending or by cutting taxes, both of which have the effect of increasing aggregate demand.

Which is an expansionary money policy quizlet?

Expansionary Monetary Policy (Quantitative Easing) involves an increase in the money supply in order to lower interest rates and increase Consumption and Investment. It is used to counter a recession.

What are the effects expansionary monetary policy?

Effects of an Expansionary Monetary Policy An expansionary monetary policy reduces the cost of borrowing. Therefore, consumers tend to spend more while businesses are encouraged to make larger capital investments.

What is expansionary policy used for quizlet?

What is expansionary policy used for? To stimulate growth in the economy.

Does expansionary monetary policy cause inflation?

In theory, expansionary monetary policy should cause higher economic growth and lower unemployment. It will also cause a higher rate of inflation.

What are some examples of contractionary monetary policy?

A contractionary monetary policy utilizes the following variations of these tools:Increase the short-term interest rate (discount rate) ... Raise the reserve requirements. ... Expand open market operations (sell securities) ... Reduced inflation. ... Slow down economic growth. ... Increased unemployment.