10 Feb According to an article, I found online it was quoted that, ‘Expansionary policy?expands the supply of money, whereas contr
Q.1 write response /reply for this discussion
Hello Everyone,
According to an article, I found online it was quoted that, "Expansionary policy expands the supply of money, whereas contractionary policy decreases the supply of a country's currency" (Moffatt, 2018). These two concepts are opposite of each other but can have multiple affects on consumers. When the Federal Reserve chooses the expansionary policy they are wanting to decrease interest rates, but bond prices will increase. It can also cause our imported goods to decrease while the exported goods increase. As for contractionary policy, it will have the opposite effect of expansionary policy. Basically, interest rates will increase because bond prices decreased. Also, exported goods will decrease and imported goods will increase. There would have to be a balance between the two in order for them to work efficiently.
When it comes to employers, during the expansionary policy, unemployment rates are down because businesses are able to borrow money to support their businesses and employees. As for contractionary policy, it slows down the economic growth which increases unemployment rates due to high-interest rates. Once again, these two work in the opposite of each other where one could be more beneficial than the other.
Reference:
Moffatt, M. (2018, December 23). Expansionary vs. Contractionary Monetary Policy. ThoughtCo. https://www.thoughtco.com/expansionary-vs-contractionary-monetary-policy-1146303
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.