If the central bank decreases the money supply, it is conducting
A) monetary policy.
B) supply-side policy.
C) fiscal policy.
D) incomes policy.

Question

Quizplus · Accepted Answer

Decreasing the money supply is a tool of monetary policy, which is under the control of the central bank. Supply-side policy focuses on increasing production and reducing costs, fiscal policy involves government spending and taxation, and incomes policy refers to government intervention in setting wages and prices.

If the Central Bank Decreases the Money Supply, It Is