Question

When the federal reserve conducts an expansionary monetary policy, what happens to the money supply? how does this affect the supply of dollar assets? explain

Answer 1

An expansionary monetary policy will move the supply of dollar assets to one side from the first inventory bend to the new supply bend and to another harmony of lessening the financing cost from to .

What is monetary policy?

Monetary policy is the policy adopted by a country's monetary authority to control either the interest rate due on very short-term borrowing or the money supply, frequently in an effort to reduce inflation.

The central bank's macroeconomic policy is known as monetary policy. It is the demand side economic strategy employed by a country's government to achieve macroeconomic objectives such as inflation, consumption, growth, and liquidity by managing the money supply and interest rates.

Price stability is the basic goal of monetary policy. The price stability goal is met when the domestic economy's overall price level remains as low and stable as possible in order to encourage long-term economic growth.

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