Question

What are the goals when a government uses expansionary monetary policy? Check all that apply.


increasing its money supply to boost the economy
decreasing its money supply to slow the economy
increasing its money supply to speed business expansion
decreasing its money supply to curb business expansion
decreasing its interest rates to increase investment spending

Answer 1

Correct answers:
- increasing its money supply to boost the economy
- increasing its money supply to speed business expansion
- decreasing its interest rates to increase investment spending

Explanation: Expansionary monetary policy increases the money supply and lowers interest rates to stimulate aggregate demand, encourage borrowing and investment, and speed economic (and business) expansion.