Classify each action as expansionary or contractionary monetary policy. reducing the discount rate. increasing the federal funds rate. buying government securities. increasing the required reserve ratio.

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Question:

Classify each action as expansionary or contractionary monetary policy. reducing the discount rate. increasing the federal funds rate. buying government securities. increasing the required reserve ratio.

Answer:

When we talk about expansionary monetary policy, it is
just a policy which inflates or increases the source of money of the country while
contractionary monetary policy decreases or lowers the source of a country’s
money.

 

So expansionary is:

reducing the
discount rate.

buying
government securities.

While Contractionary
is:

increasing
the required reserve ratio.

increasing
the federal funds rate.

They could simply hopefully guide the student sort out the question by make use of the questions and answer examples. You would certainly then have a discussion with your classmate and continue the school learning by studying the subject to one another.

Kata KunciClassify each action as contractionary or expansionary monetary policy -
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