When the U.S. government adjusts the amount of money in circulation in order to alter credit markets and employment, which of the following is the government relying on to influence the economy?

Question

Quizplus · Accepted Answer

The government is using monetary policy to influence the economy by adjusting the amount of money in circulation. Domestic policy refers to issues within a country, but not specifically related to economic policy. Fiscal policy refers to the government's use of taxes and spending to influence the economy, but adjusting the money supply is more closely associated with monetary policy. Regressive and progressive tax policies refer to specific tax structures, but do not necessarily relate to the government's use of monetary policy to alter credit markets and employment.