What does expansionary monetary policy typically aim to do?

Expansionary monetary policy is primarily used to stimulate economic growth, especially during periods of economic downturn or recession. The main objective of this policy is to increase the money supply and encourage borrowing and spending. When a central bank implements expansionary monetary policy, it typically lowers interest rates, making loans more affordable for consumers and businesses. This increase in borrowing and spending can lead to enhanced economic activity, job creation, and overall economic expansion.

By lowering interest rates, consumer expenditures on big-ticket items, such as homes and cars, tend to rise because financing these purchases becomes less expensive. Similarly, businesses may invest in new projects or hire additional employees, further promoting economic growth. Therefore, the goal of expansionary monetary policy is to create a more favorable economic environment by fostering increased consumption and investment, aimed at boosting overall economic output.

The other options focus on objectives that do not align with the intent of expansionary monetary policy. Slowing economic growth, controlling inflation, and increasing taxes typically fall under different policy responses that aim to stabilize or contract an overheated economy rather than stimulating growth.