Answer to Question #51257 in Macroeconomics for bob

Question #51257
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
1
Expert's answer
2015-03-13T09:44:37-0400
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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