The fundamental objective of monetary policy is to assist the economy in achieving
A) a rapid pace of economic growth.
B) a money supply that is based on the gold standard.
C) a full-employment, noninﬂationary level of total output.
D) a balanced-budget consistent with full employment.

Question

Quizplus · Accepted Answer

The primary objective of monetary policy is to stabilize the economy and achieve a noninflationary full-employment level of output. This involves managing the money supply and interest rates to control inflation and promote economic growth while avoiding recession or inflationary spirals. The gold standard is no longer used in modern economies, and a balanced budget is a potential goal of fiscal policy, not monetary policy.

The Fundamental Objective of Monetary Policy Is to Assist the Economy