Monetary policy refers to the government's
A) decisions on how much money to spend.
B) decisions on how much money to collect in taxes.
C) plans for retiring the national debt.
D) management of the money supply and interest rates to achieve macroeconomic objectives.

Question

Quizplus · Accepted Answer

Monetary policy refers to the government's management of the money supply and interest rates to achieve macroeconomic objectives, such as controlling inflation, stabilizing currency exchange rates, and promoting economic growth. It involves decisions on interest rates and purchase or sale of government securities, which affect the money supply in the economy. Decisions on how much money to spend and collect in taxes fall under fiscal policy. Retirement of the national debt is a separate issue and not directly related to monetary policy.

Monetary Policy Refers to the Government's