Monetary policy is the government's ability to:

Question

Quizplus · Accepted Answer

Monetary policy refers to the actions taken by the government or central bank to control the supply and availability of money in the economy in order to achieve certain macroeconomic goals such as stable prices, moderate long-term interest rates, and maximum employment. The government or central bank achieves this by manipulating the money supply through various tools such as open market operations, changing reserve requirements for member banks, and setting the discount rate. Monetary policy does not involve borrowing and spending or regulating imports and exports, which are the realms of fiscal and trade policies, respectively.

Monetary Policy Is the Government's Ability To