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: -Monetary policy involves the management of the money supply and interest rates by central banks. To stimulate a faltering economy, the central bank will cut interest rates, making it less expensive to borrow while increasing the money supply.

Detailed explanation-3: -Expansionary monetary policy: This type of monetary policy can increase the economy’s money supply through decreasing interest rates, lowering reserve requirements for banks, and the purchase of government securities by central banks.

Detailed explanation-4: -Central banks use monetary policy to manage the supply of money in a country’s economy. With monetary policy, a central bank increases or decreases the amount of currency and credit in circulation, in a continuing effort to keep inflation, growth and employment on track.

Detailed explanation-5: -Monetary policy is a set of actions to control a nation’s overall money supply and achieve economic growth. Monetary policy strategies include revising interest rates and changing bank reserve requirements. Monetary policy is commonly classified as either expansionary or contractionary.