Which action is NOT a tool of monetary policy?
A) changing the discount rate
B) changing government spending and taxes
C) changing reserve requirements
D) open market operations

Question

Quizplus · Accepted Answer

Changing government spending and taxes is a tool of fiscal policy, not monetary policy. Monetary policy refers to actions taken by the central bank to influence the money supply and interest rates in order to achieve macroeconomic goals such as controlling inflation and promoting economic growth. The tools of monetary policy include changing the discount rate, reserve requirements, and conducting open market operations.

Which Action Is NOT a Tool of Monetary Policy