The two major policy tools available for controlling economic activity are ________.

Question

Quizplus · Accepted Answer

The two major policy tools available for controlling economic activity are monetary and fiscal policies. Monetary policy involves the control of the money supply, which affects interest rates and credit availability. It is conducted by the central bank, such as the Federal Reserve in the United States. Fiscal policy, on the other hand, involves changes in government spending and taxation, which affect the level of aggregate demand in the economy. It is conducted by the government, such as the U.S. Congress and the President. Therefore, choice C is the most accurate answer.

The Two Major Policy Tools Available for Controlling Economic Activity