Accommodative Monetary Policy -- Policy implemented by the Federal Reserve to augment the stock of money that banks can dispose of for the purpose of lending. Also understood as 'easing the money supply', during which interest rates go down and people have an incentive to borrow so that there is an overall boost to the economy. An accommodative policy happens in a situation of a frail economy, high interest rate s and low prospect of inflation . Often a fall in interest rates may go far enough to worry the Fed about inflation and induce a tight money policy. See also monetary policy.
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