If the Fed wants to move from a point on the short-run Phillips curve representing high unemployment and low inflation to a poi
nt representing lower unemployment and higher inflation, then it should A. use expansionary fiscal policy.
B. use a combination of expansionary monetary and fiscal policies.
C. use expansionary monetary policy.
D. use contractionary monetary policy.
If a central bank utilizes its instruments to support the economy,it is called expansionary monetary policy. This increases the supply of money, reduces interest rates, and increases economic growth. As calculated by gross domestic product, this enhances production. It's the reverse of the monetary policy of contraction.
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