Overview
Expansionary monetary policy is a crucial tool used by central banks to stimulate economic growth, especially during periods of recession. By increasing the money supply and lowering interest rates, it encourages borrowing and spending, which can lead to higher consumer demand and job creation. Howe...
Key Terms
Example: The Federal Reserve uses monetary policy to influence the economy.
Example: A lower interest rate makes loans cheaper.
Example: High inflation can reduce purchasing power.
Example: The Fed implemented quantitative easing during the 2008 financial crisis.
Example: Economic growth is often measured by GDP.
Example: The economy entered a recession due to the pandemic.
Related Topics
Key Concepts
money supplyinterest rateseconomic growthinflation