In economics, expansionary policies
are fiscal policies
, like higher spending and tax cuts, that encourage economic growth. In turn, an expansionary monetary policy
is monetary policy
that seeks to increase
the size of the money supply
. In most nations, monetary policy is controlled by either a central bank
or a finance ministry
and Keynesian economics
significantly differ on the effects and effectiveness of monetary policy on influencing
economy; there is no clear consensus on how monetary policy affects real economic variables (aggregate output or income, employment).
Both economic schools accept that monetary policy affects monetary variables
(price levels, interest rates).