Monetary stimulus implies 1 Increasing money supply 2 Purchasing of bo...........

Economic Affairs Money Supply and Monetary Policy

Monetary stimulus implies:

1. Increasing money supply

2. Purchasing of bonds by the central bank

3. Reducing interest rates.

4. Selling of bonds by the central bank.

Select the correct answer using the codes given below:

1, 2 and 4 only

2 and 3 only

1 and 3 only

1, 2 and 3 only

Selling of bonds by the central bank will have opposite effect as it will freeze capital in exchange of Bonds Issued.

1.   Increasing money supply
2.   Purchasing of bonds by the central bank
3.   Reducing interest rates.

All these activities will unlock capital and hence are considered as monetay Stimulus.

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