A "stable monetary environment" is used to describe monetary policy consistent with
A)keeping the money income of citizens constant while population grows.
B)keeping the rate of inflation low.
C)minimizing the year-to-year fluctuations in the inflation rate.
D)both b and c.

Question

Quizplus · Accepted Answer

A stable monetary environment is achieved when the central bank implements a monetary policy that keeps the rate of inflation low while also minimizing the year-to-year fluctuations in the inflation rate. This helps to maintain price stability, which is crucial for economic growth and stability. Additionally, by keeping inflation low and stable, the purchasing power of citizens' money income is protected. Therefore, choice D is the best option as it includes both of these important factors.

A "Stable Monetary Environment" Is Used to Describe Monetary Policy