ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -These policies are intended to increase demand and aggregate spending. The goal of expansionary policy is to boost the economy during periods of slow growth or recession, though it may unintentionally increase the rate of annual inflation.

Detailed explanation-2: -Fiscal policy that increases aggregate demand directly through an increase in government spending is typically called expansionary or “loose.”

Detailed explanation-3: -The expansionary monetary policy leads to a rise in the level of money supply in the economy as there is a reduction in the cost of borrowing. This makes individuals’ consumption level and businesses spending level to expand in the economy. As a result, there is an increment in the real GDP level of a nation.

Detailed explanation-4: -An expansionary monetary policy is a type of macroeconomic monetary policy that aims to increase the rate of monetary expansion to stimulate the growth of a domestic economy.

Detailed explanation-5: -Expansionary monetary policy is a tool central banks use to stimulate a declining economy and GDP.