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Which of the following best describes the cause-and-effect chain of an expansionary monetary policy? Multiple Choice C) A decrease in the money supply will lower the interest rate, increase investment spending, and increase aggregate demand and GDP. A decrease in the money supply will raise the interest rate, decrease investment spending and decrease aggregate demand and GDP. An increase in the money supply will raise the interest rate, decrease investment spending, and decrease aggregate demand and GOP 0 0.00 An increase in the money supply will lower the interest rate, increase investment spending, and increase aggregate demand and GDP

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Option B is correct. Best describes the cause-and-effect chain of an expansionary monetary policy is an increase in the money supply will raise the interest rate, decrease investment spending, and decrease aggregate demand and GDP.

Expansionary, or loose policy is a type of macroeconomic approach that looks to empower monetary development. Expansionary policy can comprise of either money related approach or financial policy (or a mix of the two). It is essential for the overall approach solution of Keynesian financial matters, to be involved during monetary log jams and downturns to direct the disadvantage of monetary cycles.

The essential goal of expansionary policy is to help total interest to compensate for deficiencies in confidential interest. It depends on the thoughts of Keynesian financial matters, especially the possibility that the primary driver of downturns is a lack in total interest. Expansionary policy is planned to help business venture and buyer spending by infusing cash into the economy either through direct government shortfall spending or expanded loaning to organizations and customers.

Expansionary financial approach works by extending the cash supply quicker than expected or bringing down transient loan costs. It is instituted by national banks and comes to fruition through open market tasks, save prerequisites, and setting loan costs

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