Respuesta :
Answer:
a. Monetary Policy involves changing the money supply. In the United States, Monetary Policy is implemented by the Federal Reserve
b. Expansionary Monetary Policy can be used to address a Recessionary Gap; while Contractionary Monetary Policy can be used to address an Inflationary Gap.
c. To enact Contractionary Monetary Policy, the central bank will sell bonds. This decrease the amount of cash in the economy. This will cause bond prices to fall, and interest rates to rise. The change in interest rates causes investment and consumption to fall, shifting Aggregate Demand inwards.
d. To enact Expansionary Monetary Policy, the central bank will buy bonds. This increase the amount of cash in the economy. This will cause bond prices to rise, and interest rates to fall. The change in interest rates causes investment and consumption to rise, shifting Aggregate Demand outwards.
The answer to the following questions about Monetary Policy are:
A)
- the money supply
- Federal Reserve
B)
- Expansionary Monetary Policy
- Contractionary Monetary Policy
C)
- Sell
- Decrease
- Fall
- Rise
- Fall
- Aggregate demand inwards
D)
- Buy
- Increase
- Rise
- Fall
- Rise
- Aggregate demand outwards
About Monetary policy:
Monetary policy is a set of tools used by a country's central bank to promote long-term economic growth by restricting the amount of money available to banks, consumers, and businesses.
The goal is to maintain a stable economic growth rate that is neither too rapid nor too slow.
For more information about Monetary Policy refer to the link:
https://brainly.com/question/13063231
