Monetary policy primarily influences the economy through changes in:

Question

Quizplus · Accepted Answer

Monetary policy primarily influences the economy through changes in the interest rate, which affects borrowing costs and ultimately impacts consumer and business spending. Government spending is more influenced by fiscal policy, and while the Fed's own spending may have some impact, it is not the primary mechanism through which monetary policy operates. The discount rate may be used as a tool for implementing monetary policy, but it is not the primary target of policy changes.

Monetary Policy Primarily Influences the Economy Through Changes In