Explain how anexpansionary monetary policyworks and illustrate its impact on the economy.

Question 1.Show this monetary policy by illustrating the shift of money supply (MS) curve on a graph. How does the interest rate change at the new equilibrium point?

Question 2.How does the change in interest rate from the previous question affect aggregate demand (AD)?

1. Illustrate the shift of the AD curve with a graph.
2. How does the price level and real GDP change?

Question 3:Do you think that a monetary policy response to the coronavirus pandemic has been effective? Please give a short answer. You can refer to some of the online articles.

• use the link below to respond to question 3

Federal Reserve: "COVID-19's Effects on the Economy and the Fed's Response"https://research.stlouisfed.org/publications/page1-econ/2020/08/10/covid-19s-effects-on-the-economy-and-the-feds-response