The key policy inputs controlled directly by the central bank are _____.
A) the government deﬁcit
B) interest rates
C) the level of government borrowings
D) income tax rates

Question

Quizplus · Accepted Answer

The central bank directly controls interest rates as part of its monetary policy tools to influence economic activity, inflation, and employment levels. Other options like government deficit, level of government borrowings, and income tax rates are typically under the purview of the government's fiscal policy, not directly controlled by the central bank.

The Key Policy Inputs Controlled Directly by the Central Bank