A.During a recession or periods of slow economic growth, the Federal Reserve may attempt to "stimulate" the economy by engaging in expansionary monetary policy.

1. Generally speaking, what is expansionary monetary policy?
2. Identify by name and briefly describe the primary method/tool used by the Federal Reserve to implement monetary policy.
3. Briefly explain 2 negative consequences of expansionary monetary policy.Assume that any time lags have already been overcome or are not applicable.

B.Sometimes in order to stimulate more consumer and business spending, the Federal Reserve will engage in expansionary monetary policy, and the federal government will compel banks to relax their lending standards for a time to entice individuals and business organizations to take out more loans than they would do under more restrictive standards.This was done in the early-mid 2000s, which led to a housing bubble that ultimately collapsed and played a significant role in bringing about the Recession of 2007-2009.

1. Is the relaxing of bank lending standards to bring about more loans a wise policy to implementfromtime-to-time, or is the risk to the overall economy too great to makeuse of such a policy?Explain in detail whyor why not