Monetary policy refers to the government's attempt at smoothing business cycles through the use of changes in:

Question

Quizplus · Accepted Answer

Monetary policy involves the use of changes in interest rates to impact the economy. By changing the interest rates, the government can influence borrowing and lending, which affects spending, investment, and ultimately economic growth. A change in tax rates or wage rates would fall under fiscal policy, while changes in government spending would also be a part of fiscal policy but not monetary policy.

Monetary Policy Refers to the Government's Attempt at Smoothing Business