Changing the quantity of money, hence the interest rate, hence overall spending in the economy, is use of _____ policy.

Question

Quizplus · Accepted Answer

Changing the quantity of money and interest rates are under the control of central banks and is an example of monetary policy. Fiscal policy refers to the government's spending and taxation policies. Free-market and trickle-down policies do not specifically relate to controlling the money supply and interest rates.

Changing the Quantity of Money, Hence the Interest Rate, Hence