An increase in the money supply aimed at increasing aggregate output is referred to as ?
Correct answer: B. expansionary monetary policy
- A. contractionary fiscal policy
- B. expansionary monetary policy
- C. contractionary monetary policy
- D. expansionary fiscal policy
Explanation
Expansionary monetary policy increases the money supply to lower interest rates, encourage spending and investment, and raise aggregate output. Fiscal policy instead uses government spending or taxation.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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