Explain how different monetary policies affect the money supply and the economy

Monetary policies refer to actions that are taken by governments (or the duly appointed monetary regulatory committees in a country) to control the behavior of the economy. Monetary policies can be divided into two: contractionary and expansionary. When an expansionary monetary policy is implemented, the amount of money in circulation (in a country) is increased through lowering of interest rates. The ultimate effect of this is that business and consumer spending goes up (loans are easily available), unemployment rates drop and the economy grows. Contractionary measures are introduced through raising interest rates thereby liquidity (availability of money in the economy) is reduced. As a result, consumer spending reduces and so inflation is kept within sustainable levels.

$527.7.if the following was the question  $527.7 is the answer.students who are trying to raise funds have an agreement with a local pizza chain. the chain has agreed to sell them pizzas at a discount, which the students can then resell to families in the local community for a profit. it is expected that of the 500 families in the community, at most 70% will buy pizza. based on a survey of their personal preferences, the students believe that they should order no more than 120 cheese pizzas, no more than 150 pepperoni pizzas, and no more than 100 vegetarian pizzas. they also want to make sure that at least 20% of the total pizzas are cheese and at least 50% of the pizzas are pepperoni. they make a profit of $1.45, $1.75, and $1.98, respectively, for each cheese, pepperoni, and vegetarian pizza they resell. how many pizzas of each type should they buy?