In most advanced economies, central banks target ________ to conduct monetary policy.
A) tax rates
B) the money supply
C) interest rates
D) government debt
E) exchange rates

Question

Quizplus · Accepted Answer

Central banks in most advanced economies target interest rates to conduct monetary policy. By setting a target for short-term interest rates, the central bank is able to influence borrowing costs for businesses and consumers, which affects spending, investment, and inflation levels. This is known as the interest rate channel of monetary policy.

In Most Advanced Economies, Central Banks Target ________ to Conduct