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(Solved): If the economy is at equilibrium as shown in the diagram above, then an expansionary monetary pol ...
If the economy is at equilibrium as shown in the diagram above,
then an expansionary monetary policy will
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increase output and unemployment, but have no effect on inflation. |
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decrease output and unemployment, but increase inflation. |
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increase output, decrease unemployment, and increase inflation. |
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have no effect on output, decrease unemployment and increase inflation |
Expert Answer
Expansionary monetary policy aims at increasing the money supply in the market, it can be by purchasing securities from ope