Which of the following are monetary policy goals?
I. maintain high interest rates
II. keep unemployment rates low
III. reduce the size of the banking sector
IV. prevent high rates of inflation
A) I, II, III, and IV
B) I, II, and III
C) II, III, and IV
D) II and IV

Question

Quizplus · Accepted Answer

The goals of monetary policy are to prevent high rates of inflation and keep unemployment rates low. Option I refers to the tool used by monetary policy (interest rates) rather than a goal. Option III is not a goal of monetary policy, but rather a potential outcome of policy decisions. Therefore, only II and IV are goals of monetary policy.

Which of the Following Are Monetary Policy Goals