Economic Literacy: 'Accommodative Monetary Policy'

Friday, January 06, 2017

When a central bank (such as the MMA) attempts to expand the overall money supply to boost the economy when growth is slowing (as measured by GDP).

This is done to encourage more spending from consumers and businesses by making money less expensive to borrow by lowering the interest rate. 

Furthermore, MMA also has the authority to purchase Treasuries on the open market to infuse capital into a weakening economy.

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