ECO 372 Week 3 DQ 1

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•What is the difference between contractionary and expansionary monetary policy? What is the intention of each policy under a depression, recession, or robust economy? Which type of monetary policy is more appropriate today and why?

Response
What is the difference between contractionary and expansionary monetary policy?
Expansionary monetary policy increases the money supply and decreases the interest rate. This helps increase investment and output.
Contractionary monetary policy decreases the money supply and increase the interest rate. This decreases investments and output.
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