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MMLU / In a recession expansionary monetary policy is designed to

Problem

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question

In a recession expansionary monetary policy is designed to

choices

  1. decrease aggregate demand so that real prices will decrease which is good for the economy.
  2. increase aggregate demand which will increase real output and increase employment.
  3. increase unemployment but low prices negate this effect.
  4. keep interest rates high which attracts foreign investment.

subject

high_school_macroeconomics

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Source and history

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