ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Here is how expansionary monetary policy translates into the economy: Lower interest rates decrease the cost of borrowing money, which encourages consumers to increase spending on goods and services and businesses to invest in new equipment.

Detailed explanation-2: -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-3: -Expansionary monetary policy works by expanding the money supply faster than usual or lowering short-term interest rates.

Detailed explanation-4: -Expansionary Monetary Policy Also known as loose monetary policy, expansionary policy increases the supply of money and credit to generate economic growth. A central bank may deploy an expansionist monetary policy to reduce unemployment and boost growth during hard economic times.

Detailed explanation-5: -The Federal Reserve has three expansionary monetary policy methods: lowering interest rates, decreasing banks’ reserve requirements, and buying government securities.