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  • 04-05-2020
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Why does the Federal Reserve need to implement a expansionary and contractionary monetary policy?

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riosisabella015
riosisabella015 riosisabella015
  • 04-05-2020

Answer:

"Expansionary monetary policy is when a central bank uses its tools to stimulate the economy. That increases the money supply, lowers interest rates, and increases aggregate demand. It boosts growth as measured by gross domestic product. ... Expansionary monetary policy deters the contractionary phase of the business cycle."

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