Answer to Question #51257 in Macroeconomics for bob
State True, False or Uncertain. When an economy goes into recession, a central bank that is interested in targeting inflation should pursue an expansionary monetary policy
An expansionary monetary policy is policy that seeks to expand the money supply to encourage economic growth. It will lead to the increase in inflation. A contractionary monetary policy is intended to slow inflation in order to avoid the resulting distortions and deterioration of asset values. So, it is more appropriate to use contractionary monetary policy.
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