A shift to a more expansionary monetary policy will a. exert a stabilizing impact if the effects of the policy are felt when the economy is operating at its full-employment capacity. b. exert a stabilizing impact on the economy if the effects of the policy are felt during an economic downturn. c. help bring inflation under control. d. reduce the natural rate of unemployment.

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27-06-2022
Business

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A shift to a more expansionary monetary policy will a. exert a stabilizing impact if the effects of the policy are felt when the economy is operating at its full-employment capacity. b. exert a stabilizing impact on the economy if the effects of the policy are felt during an economic downturn. c. help bring inflation under control. d. reduce the natural rate of unemployment.

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Tundexi Tundexi · Answer 1 · 2022-06-29T16:10:12+02:00

Most time, any shift to a more expansionary monetary policy will exert a stabilizing impact on the economy if the effects of the policy are felt during an economic downturn.

What is an Expansionary monetary policy?

This fiscal policy is employed by the central bank to stimulate the economy because its increases the money supply, lowers interest rates, increases demand etc.

Therefore, the Option B is correct.