What is the government attempting to achieve through expansionary monetary policy?

Expansionary monetary policy is implemented by a government or central bank primarily to stimulate economic growth, particularly during periods of recession or economic slowdown. The key goals are to increase the money supply, lower interest rates, and encourage borrowing and spending. When the government undertakes this policy, it aims to achieve increased employment and boost economic activity by making credit more accessible and cheaper for individuals and businesses.

When interest rates are reduced, consumers are more likely to take out loans for major purchases (like homes and cars), and businesses are incentivized to invest in expansion projects, leading to job creation. This uptick in spending supports aggregate demand, which in turn can help lift the economy out of a stagnation phase.

While the other choices may touch on areas of economic concern, they do not capture the primary objective of expansionary monetary policy as effectively. Lower inflation rates (one option) generally might require contractionary measures rather than expansionary ones. Stabilization of housing prices and reduction of national debt are also not direct goals of this policy. Instead, the immediate focus of expansionary monetary policy is to spur economic growth and maximize employment, making increased employment and economic activity the most appropriate answer.