n NISM Certifications
XV NISM Series XV
Medium

What is the outcome when central banks adopt an expansionary monetary policy?

Practice question from NISM XV Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    More credit availability for borrowers

  2. B

    Increase in money supply

  3. C

    Reduction in interest rates

  4. D

    Only A

  5. E

    Only B

  6. F

    Both A and B

  7. All A, B and C

    Correct answer

Why this is the answer

Expansionary monetary policy increases the money supply, reduces interest rates, and makes borrowing cheaper, resulting in more credit availability for businesses and consumers.

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