ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A central bank may deploy an expansionist monetary policy to reduce unemployment and boost growth during hard economic times. It usually does so by lowering the interest rates and increasing the money supply to boost more employment opportunities.

Detailed explanation-2: -High Employment During a period of expansionary monetary policy, unemployment declines because companies find it easier to borrow money to expand their operations. As more people find jobs, they have more money to spend, which increases revenues to business and results in more jobs.

Detailed explanation-3: -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.

Detailed explanation-4: -An expansionary monetary policy decreases unemployment as a higher money supply and attractive interest rates stimulate business activities and expansion of the job market.

Detailed explanation-5: -Increased Inflation. One of the consequences of expansionary monetary policy is that prices will rise. This increase in prices happens because when more people spend money, and aggregate demand rises, firms can charge more for their goods and services due to that increase in demand.