Classify the following scenarios based on their likely outcomes of an expansionary monetary policy: A. Increased consumer spending, B. Higher inflation rates, C. Decreased unemployment, D. Increased savings rates.

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Expansionary monetary policy lowers interest rates and boosts the money supply, making borrowing cheaper and encouraging people to spend more. Because more money is chasing the same goods, prices rise, so inflation tends to increase. With lower borrowing costs, businesses hire more workers, which typically lowers unemployment. However, the policy does not usually raise people’s savings rates; in fact, easier credit often reduces the incentive to save. For example, when a central bank cuts rates, consumers buy more cars and houses, prices climb, jobs grow, but people tend to spend rather than save.

Classify the following scenarios based on their likely outcomes of an expansionary monetary policy: A. Increased consumer spending, B. Higher inflation rates, C. Decreased unemployment, D. Increased savings rates.

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