Question

An _ policy is employed when the government chooses to run a larger deficit

Answer 1

an _ policy is employed when the government chooses to run a larger deficit?

expansionary

Answer 2

An expansionary policy is employed when the government chooses to run a larger deficit.

In order to stimulate the economy, the central bank implement an expansionary monetary policy that increases the money supply, lowers interest rates, and increases aggregate demand. It fosters growth as measured by gross domestic product.

It is the opposite of contractionary monetary policy.