Will expansionary monetary policy definitely increase the money supply? Why?
The so-called expansionary monetary policy is a kind of monetary policy, that is, to stimulate aggregate demand by increasing the growth rate of money supply. Under this policy, it is easier to get credit and interest rates will fall. This policy is a policy to stimulate economic growth during the economic depression, and the object of monetary policy adjustment is the money supply and the total purchasing power of the whole society. The concrete manifestations are: cash in circulation and deposits of individuals, enterprises and institutions in banks. The substantial goal of expansionary monetary policy is to stimulate effective demand. If the central bank only lowers the RRR and does not put money in, it will inevitably lead to the demand for money being greater than the supply of money. On the contrary, it will raise interest rates and raise the price level, which will be counterproductive, and will definitely restrict the investment of enterprises and the consumption of residents, thus failing to achieve the original intention of stimulating demand. Therefore, the essence of expansionary monetary policy is to increase the money supply and reduce the interest rate level through a large amount of money supply, thus stimulating demand! Without increasing the effective supply of money, the purpose of expansion cannot be achieved.