Which of the following is an example of a monetary policy?
A) The federal government increases income tax rates on people earning more than $250 000.
B) The duration of unemployment benefits is extended to 99 weeks.
C) The Bank of Canada increases interest rates.
D) Congress authorizes a cut in spending on education.

Question

Quizplus · Accepted Answer

Monetary policy refers to actions taken by a central bank to influence the supply, availability, and cost of money and credit to help promote economic stability and growth. Increasing interest rates is an example of a contractionary monetary policy, which aims to slow down the economy by making borrowing more expensive and reducing the supply of money in circulation. The other options given are either fiscal policies (A and D) or social policies (B) and do not fall under the purview of monetary policy.

Which of the Following Is an Example of a Monetary