The federal government is involved in the country's money supply through the central bank. In real life, examples of involvement include buying and selling treasury bills and bills. According to Hung and Thompson (2016), such a strategy is called open market operation. Other examples include the change in bank reserves involved and the direct implication that occurs through the increase or decrease in government spending or change in tax rates. Say no to plagiarism. Get a Custom Essay on “Why Violent Video Games Should Not Be Banned”?Get the Original EssayExpansionary monetary policy is one of the strategies employed by the federal government to stimulate economic activity. However, this policy has not been effective in the past. As Romer and Romer (2013) explain, key drivers of inefficiency include uncertainties in the economic environment and excessive discretion placed on federal government policymakers. Consequently, policymakers have adopted policies that aim for short-term gains in employment and growth (Goodhart, 2015). The recurrent adoption of excessive short-term targets has led to high inflation levels and an unstable economy, resulting in low economic growth. Nevertheless, the federal government continues to use expansionary monetary policy because it has significant benefits in the economy. Obviously, the system generally aims to increase the money supply in the economy. According to Ma (2015), an increase in the money supply can help turn around an economy in recession through an improvement in production leading to an increase in corporate tax and income tax. As a result, the government can provide better social services to citizens and thus improve their lives. Additionally, expansionary monetary policy lowers interest rates, which allows emerging and mid-sized businesses to grow and encourages foreign investment (Romer and Romer, 2013). Businesses create employment opportunities while the injection of foreign currencies into the economy leads to improved exchange rates, thereby enhancing economic development. Keep in mind: this is just a sample. Get a personalized article from our expert writers now. Get a Custom Essay Overall, expansionary monetary policy has not been effective in recent years, but the federal government still resorts to it. The main reasons for its continued use include creating jobs, managing inflation rates and ensuring economic growth and stability. In conclusion, expansionary monetary policy has significant advantages but must be used with caution..