Monetary policy refers to the actions the
A)Prime Minister and Parliament take to manage the money supply and interest rates to pursue their economic objectives.
B)Bank of Canada takes to manage the money supply and interest rates to pursue its macroeconomic policy objectives.
C)Prime Minister and Parliament take to manage government spending and taxes to pursue their economic objectives.
D)Bank of Canada takes to manage government spending and taxes to pursue its economic objectives.
E)Commercial bank decisions determining when and to whom to make loans.

Question

Quizplus · Accepted Answer

Monetary policy is the process by which the central bank (in this case, the Bank of Canada) adjusts the money supply and interest rates to achieve macroeconomic objectives such as price stability, full employment, and economic growth. The Prime Minister and Parliament are responsible for fiscal policy, which involves managing government spending and taxes to achieve economic objectives. Commercial bank decisions are not considered monetary policy as they are determined by the individual banks themselves.

Monetary Policy Refers to the Actions the