Question

When the central bank acts in a way that causes the money supply to increase while aggregate demand remains unchanged, it is:?

Answer 1

It is "following an expansionary monetary policy".

Step-by-step explanation:

When the central bank uses expansionary monetary policy, money supply increases and the interest rates decreases, this will lead to no change in aggregate demand. It also affects the value of the currency and that is lowering its value but there is improvement in growth of domestic economy.