Yes, the bank should use expansionary monetary policy.
When the economy is in recession and the produces less than its potential GDP, then expansionary fiscal policy is most suitable. The contractionary fiscal policy reduces the aggregate demand by either cutting government expenditure or raising the taxes.
During difficult economic circumstances, the central bank may use the expansionary monetary policy to reduce the unemployment and stimulate growth. It normally does so by decreasing its benchmark federal funds rate, or the interest rate at which banks lend to one another to meet reserve requirements.
Therefore, the answer is yes.
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