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Sagot :
The right choices are a reduction in the reserve ratio and a request from the FOMC to buy securities, that is options (a) and (b).
What is an expansionary monetary policy?
A central bank's use of expansionary monetary policy contributes to economic growth. This increases the amount of money that is available, lowers interest rates, and increases demand. It encourages economic growth. It lowers the value of the currency, which lowers the exchange rate.
A approach employed by central banks to strengthen a sagging GDP and economy is expansionary monetary policy. The three instruments the Federal Reserve employs to carry out an expansionary monetary policy are decreased reserve requirements for banks, increased purchases of government assets, and reduced interest rates.
Lower interest rates make borrowing money more accessible, which motivates consumers to increase their expenditures on goods and services and businesses to increase their investments in new equipment.
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