Passive monetary policy
A) is the strategic use of monetary policy to counteract macroeconomic expansions and contractions.
B) is when central banks purposefully choose to only stabilize money and price levels through monetary policy.
C) is when central banks take orders from the ruling party on how to conduct monetary policy.
D) is when central banks only use fiscal policy to try to influence the economy.
E) has a real effect on the economy in the long run.

Question

Quizplus · Accepted Answer

Passive monetary policy is when central banks only aim to stabilize money and price levels through monetary policy. This is in contrast to active monetary policy, where central banks proactively use monetary policy to counteract expansions and contractions in the economy.

Passive Monetary Policy