Monetary policy includes changes in
A) interest rates.
B) taxes.
C) exports.
D) imports.
E) government purchases.

Question

Quizplus · Accepted Answer

Monetary policy refers to the actions taken by the central bank to manage the money supply and interest rates in order to achieve specific macroeconomic objectives. This is primarily done by adjusting the overnight interest rate that banks use to lend money to each other. Therefore, changes in interest rates make up a significant portion of monetary policy. Taxes, exports, imports, and government purchases are all components of fiscal policy, which involves changes in government spending and taxation.

Monetary Policy Includes Changes in