chloeroebuck2021
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Suppose that the economy is currently below its long-run equilibrium output. Which of the following is an example of monetary policy that can move the economy back toward full employment equilibrium?


Raising income taxes to help pay off government debt.

Reducing the money supply to push interest rates higher, encouraging more saving.

Increasing the money supply to reduce interest rates, encouraging more spending and investment.

Decreasing income taxes to encourage more spending and investment.

Respuesta :

lawrencemma2165
Increasing the money supply to reduce interest rates, encouraging more spending and investment.

An expansionary monetary policy, by lowering interest rates, stimulates investment and consumption expenditure. By increasing aggregate demand, such a policy can help move the economy back toward full employment output.

Answer:

C

Explanation:

Increasing the money supply to reduce interest rates, encouraging more spending and investment.

Pls brainliest :)

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