Which monetary policy tool is considered an expansionary tool A.cutting taxes B.decreasing the discount rate C.increasing the reserve requirements D.increasing government spending?

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2026-07-30 16:40

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The monetary policy tool considered expansionary is B. decreasing the discount rate. Lowering the discount rate encourages banks to borrow more from the central bank, which increases the money supply and stimulates economic activity. While cutting taxes and increasing government spending are fiscal policy tools, increasing reserve requirements is contractionary rather than expansionary.

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