When central banks purposefully choose to only stabilize money and price levels through monetary policy,it is known as ________ monetary policy.
A) active
B) expansionary
C) contractionary
D) adaptive
E) passive

Question

Quizplus · Accepted Answer

Passive monetary policy refers to a situation where the central bank only focuses on stabilizing money and price levels through monetary policy, without actively striving to influence economic growth or employment levels. This approach is often seen as more conservative and less interventionist than active monetary policy, which seeks to steer the economy in a particular direction through changes in interest rates, money supply, or other monetary tools.

When Central Banks Purposefully Choose to Only Stabilize Money and Price