Macroeconomics

MCQ - 68-4078

Question:

Expansionary monetary policy is designed to

decrease the interest rate, increase private investment, increase aggregate demand, and increase domestic output.
decrease the interest rate, increase private investment, increase aggregate demand, and increase the unemployment rate.
increase the interest rate, increase private investment, increase aggregate demand, and increase domestic output.
decrease the interest rate, increase private investment, increase aggregate demand, and increase the unemployment rate.
increase the interest rate, decrease private investment, decrease aggregate demand, and decrease the price level.

Correct Answer: A

Explanation:

Expanding the money supply decreases the interest rate, increases investment, and stimulates AD.

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