if the economy is in recession with high unemployment and output below potential gdp, then would cause the economy to return to its potential gdp? group of answer choices a loose monetary policy a tight monetary policy fewer loanable funds higher interest rates

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24-11-2022
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if the economy is in recession with high unemployment and output below potential gdp, then would cause the economy to return to its potential gdp? group of answer choices a loose monetary policy a tight monetary policy fewer loanable funds higher interest rates

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shristiparmar1221 shristiparmar1221 · Answer 1 · 2022-11-29T09:14:28+01:00

A loose monetary policy might help the economy recover to its potential GDP if it were experiencing high unemployment, a recession, and poor output. As a result, option (A) is the preferable one.

What is a loose monetary policy?

Expansionary monetary policy, commonly referred to as loose monetary policy, boosts the availability of credit and money to encourage economic growth. In difficult economic times, a central bank may implement an expansionist monetary policy to lower unemployment and increase growth.

The rate decreases when the central bank adopts a loosening policy, often known as injecting cash into the economy by acquiring or borrowing securities.

Hence, option (A) is accurate.

Learn more about a loose monetary policy, from:

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