Monetary policy attempts to change the level of spending by altering interest rates.

Question

Quizplus · Accepted Answer

This statement is true. Monetary policy is the process by which a central bank or monetary authority manages the money supply to achieve specific goals, such as stabilizing prices, controlling inflation, or promoting economic growth. One tool that central banks use to implement monetary policy is changing interest rates, which can influence borrowing and spending behavior in the economy. By raising or lowering interest rates, central banks can encourage or discourage borrowing and investment, which can affect aggregate demand and economic activity.

Monetary Policy Attempts to Change the Level of Spending by Altering