Monetary policy primarily influences the economy through changes in:

Question

Quizplus · Accepted Answer

Monetary policy primarily influences the economy through changes in the interest rate, which in turn affects borrowing, spending, and investing habits of individuals and businesses. Government spending and spending by the Fed are the tools of fiscal policy, not monetary policy. The discount rate is the interest rate at which banks can borrow money from the Federal Reserve, but changes in this rate are not the primary tool of monetary policy.

Monetary Policy Primarily Influences the Economy Through Changes In