Question: Hello! Could you please help me on this question? You have been appointed as a chief economist at the Central Bank of EconLand. The statistics

Hello! Could you please help me on this question?

"You have been appointed as a chief economist at the Central Bank of EconLand. The statistics shows that EconLand is in a recessionary gap. You have to take actions to control the situation. Well, your options are limited to either contractionary or expansionary monetary policies.

Would you implement one or the other option, or both?"

I am not sure if will better to apply expansionary monetary policy as it can help the economy to increase the money supply and return to the potential GDP by increasing the money supply can be beneficial for the country.

Thank you

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