# 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.

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.

government securities.

While Contractionary
is:

increasing
the required reserve ratio.

increasing
the federal funds rate.

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