Monetary policy attempts to affect the overall level of spending by making changes in:
A) taxes.
B) taxes and spending.
C) taxes and interest rates.
D) interest rates and the quantity of money.

Question

Quizplus · Accepted Answer

Monetary policy primarily seeks to influence the level of spending in the economy by controlling the supply of money and interest rates. Therefore, the correct choice is D, which identifies interest rates and the quantity of money as the tools monetary policy uses to affect spending.

Monetary Policy Attempts to Affect the Overall Level of Spending