Economics · Macroeconomics
Assertion (A): An expansionary monetary policy adopted by the central bank during an economic slowdown increases aggregate demand in the economy. Reason (R): Expansionary monetary policy reduces interest rates and increases the money supply, which encourages investment and consumption expenditure. Choose the correct answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1(A) is false but (R) is true.
- 2(A) is true but (R) is false.
- 3Both (A) and (R) are true but (R) is NOT the correct explanation of (A).
- 4Both (A) and (R) are true and (R) is the correct explanation of (A).✓
Correct answer
Both (A) and (R) are true and (R) is the correct explanation of (A).
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