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CH7 - Monetary Policy (MP), 2 ways, It is a demand management policy taken…

- - - - Affects Investments, I
    - - Affects Consumption, C
        
        QUANTITY EASING (USED IN LIQUIDITY TRAP / LOW INTEREST RATES) : Deliberate attempt by the Central Bank to increase Money Supply through the deliberate purchase of bonds and bills. Increase in Money Supply will stimulate spending and investments. AD increases, increase in RNY (+multiplier effect) and lead to economic growth