A passive monetary policy adjusts the money supply automatically in response to economic conditions.

Name: A passive monetary policy adjusts the money supply automatically in response to economic conditions.
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Question

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A passive monetary policy, by definition, does not actively adjust the money supply in response to economic conditions; instead, it maintains a consistent approach or follows set rules, unlike an active monetary policy which adjusts the money supply to meet economic objectives.

A Passive Monetary Policy Adjusts the Money Supply Automatically in Response