Question

A shift to a more expansionary monetary policy will generally _________ in the short run, but if the rapid monetary expansion persists, the long-run result will be ______.(fill in the blanks.)

Answer 1

A modification to a more expansionary monetary policy will usually expand output and employment in the short run but if the rapid monetary expansion perseveres the long run will be inflation. A rule by monetary the proven command to enlarge money supply and increase economic activity, mainly by charging interest rates low to reassure appropriating by companies, individuals and banks. An expansionary monetary policy can comprise quantifiable interpretation, whereby central banks safeguarding properties from banks. This has the result of dropping revenues on bonds and making inexpensive borrowing for banks. This in chance increases banks ability to offer to personalities and industries. An expansionary monetary policy also dangers ramping up price increases.