The effect of money on the economy is called ________.
A) monetary supply
B) monetary policy
C) fiscal policy
D) monetary demand

Question

Quizplus · Accepted Answer

The effect of money on the economy is referred to as monetary policy. Monetary policy is the process by which the central bank controls the money supply in the economy to achieve its macroeconomic objectives, such as price stability, full employment, and economic growth. Fiscal policy, on the other hand, refers to government spending and taxation policies that impact the economy. Monetary demand is not a commonly used term in economics. Monetary supply may be used interchangeably with money supply, which refers to the total amount of money in circulation in the economy.

The Effect of Money on the Economy Is Called ________