Changing the rate at which the central bank makes loans counts as:
A) fiscal policy.
B) monetary policy.
C) neither fiscal nor monetary policy.
D) both fiscal and monetary policy.

Question

Quizplus · Accepted Answer

Changing the rate at which the central bank makes loans is a tool used by the central bank to influence the supply of money in the economy. This is known as monetary policy. Fiscal policy refers to actions taken by the government to influence the economy, such as changes in taxation and government spending. Therefore, changing the rate at which the central bank makes loans is not fiscal policy.

Changing the Rate at Which the Central Bank Makes Loans