What is a potential negative effect of an expansionary policy?

Increased Inflation.,

Cutting interest rates isn’t guaranteed to cause a strong economic recovery. Expansionary monetary policy may fail under certain conditions.

If confidence is very low, then people may not want to invest or spend, despite lower interest rates.

In a credit crunch, banks may not have funds to lend, therefore although the Central Bank cuts base rates, it is still difficult to get a loan from a bank.

Commercial banks may not pass the base rate cut on.

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explanation:

mount st. helens in washington erupts, causing a massive avalanche and killing 57 people on this day in 1980. ash from the volcanic eruption fell as far away as minnesota. seismic activity at mount st. helens, which is 96 miles south of seattle, began on march 16.