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Monetary Policy: The Federal Reserve

Question 12 • IL-Economics

Increasing the amount of credit that is available within an economy is done through [___]monetary policy.

Answer
A
expansionary
B
contractionary

Explanation

Expansionary monetary policy increases the money supply and makes more credit available in the economy, often by lowering interest rates or purchasing securities. Contractionary policy does the opposite by reducing the money supply or making borrowing more expensive, so the correct choice is expansionary.

AI-written and checked against the verified answer.

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