4.4 Monetary Policy

Question 1

define monterary polic

Answer 1

Monetary policy is a government policy controls money supply (availability and cost of money) in an economy in order to attain growth and stability

Question 2

wht is expansoioanry moneary policy

Answer 2

Expansionary monetary policy is where the government increases money supply by cutting interest rates

Question 3

Wahat is the ffect of expansuonary monetary?

Answer 3

Economic growth and an improvement in the balance of payments will be experienced and employment will rise.

Question 4

What is contactionary monetary policy?

Answer 4

Contractionary monetary policy is where the government decreases money supply by increasing interest rates.

Question 5

Wahat is thee ffect of contractionary monetary?

Answer 5

This helps slow down economic growth and reduce inflation, but at the cost of possible unemployment resulting from the fall in output.