What are the two main purposes of monetary policy?

Question

Quizplus · Accepted Answer

The two main purposes of monetary policy are to control inflation and limit unemployment. Monetary policy is the process by which a central bank, such as the Federal Reserve in the United States, adjusts the amount of money in circulation and the interest rates at which banks lend and borrow money. By controlling the money supply and interest rates, the central bank can influence the economy and achieve its goals of controlling inflation and limiting unemployment. Option A is incorrect as it only explains the functions of banks, not monetary policy. Option C is incorrect as it does not relate to monetary policy. Option D is incorrect as it is not one of the main purposes of monetary policy.

What Are the Two Main Purposes of Monetary Policy