Central banks can use monetary policy to
A) turn prices from inflexible to flexible.
B) force private banks to lend out reserves.
C) make it easier for people and businesses to borrow.
D) print money.
E) steer the economy out of overexpansion.

Question

Quizplus · Accepted Answer

Central banks can adjust interest rates to make it easier or more difficult for people and businesses to borrow money. Lowering interest rates can encourage borrowing and stimulate economic activity, while raising interest rates can discourage borrowing and slow down inflation.

Central Banks Can Use Monetary Policy to