Answered

When a central bank uses its powers over the banking system to engage in "against the business cycle" monetary policy, this is called:

A. countercyclical policy
B. contractionary policy
C. expansionary policy
D. fiscal policy



Answer :

GinnyAnswer

Final answer:

Expansionary and contractionary monetary policies are tools used by central banks to manage the economy.


Explanation:

Expansionary monetary policy aims to increase the money supply, reduce interest rates, and boost aggregate demand to combat recession. On the other hand, contractionary monetary policy seeks to reduce the money supply, raise interest rates, and control inflation. These policies are tools used by central banks to regulate the economy.

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