A Monetary Theory – The Expansion Phase (1)
{"Image DocumentName": "A Monetary Theory \u2013 The Expansion Phase (1)", "Image ImageDescription": "1. The central bank increases quantity of money by reducing the interest rate (discount rate) that it charges banks on loans. Recall that the usual way that the central bank increases the quantity of money is to buy government bonds with new currency. 2. Entrepreneurs borrow the money from banks to finance new production and investment [Assume that entrepreneurs do not anticipate a cycle]. The lower interest rate reduces the costs of expanding production, investing in product improvement, and conducting cost-cutting experiments.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}