Intermediate Macroeconomic Theory
Expansionary monetary policy is a macroeconomic strategy used by central banks to stimulate economic growth by increasing the money supply and lowering interest rates. This approach aims to boost consumer spending and investment, ultimately leading to higher levels of employment and economic activity. The effectiveness of this policy is influenced by various factors, including the tools employed by the central bank, the responsiveness of the economy, and potential limitations that may arise in certain economic conditions.
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