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The federal reserve's expansionary monetary policy is likely designed to either prevent or moderate economic downturns and recessions.

What is an Expansionary Monetary Policy?

  1. A type of macroeconomic monetary policy known as an expansionary monetary policy aims to accelerate monetary expansion to encourage domestic economic expansion.
  2. The expansion of the money supply must help the economy grow.
  3. Consumer spending rises as a result of the money injection, as do business capital investments.

What Are the Effects of an Expansionary Monetary Policy?

The economy may undergo significant transformations as a result of an expansionary monetary policy.The most typical outcomes are as follows:

  1. Stimulation of economic growth.
  2. Increased inflation.
  3. Currency devaluation.
  4. Decreased unemployment.

The federal reserve's expansionary monetary policy is likely designed to either prevent or moderate economic downturns and recessions.

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