WOU Study

Title: Expansionary Monetary Policy [Print this page]

Author: super Time: 22-10-2016 01:09
Title: Expansionary Monetary Policy
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Expansionary Monetary Policy - during a recession when unemployment is a problem

To increase the money supply, the BNM can

buy government bonds (an open market purchase)
lower the discount rate
lower the required reserve ratio

Contractionary Monetary Policy - when inflation is the problem

To decrease the money supply, the BNM can

sell government bonds (an open market sale)
raise the discount rate
raise the required reserve ratio

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