Monetary Policy Tools Include

question 27

Multiple Choice

Monetary policy tools include:

• A)Income taxes and the discount rate.
• B)Open market operations and government spending.
• C)The reserve ratio and the discount rate.

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Definitions:

Natural Monopolies

Situations in which a single firm can supply a good or service to an entire market more efficiently than multiple firms could, often due to high infrastructure costs making competition impractical.

Allocative Efficiency

An economic state where resources are allocated in a way that maximizes the net benefit to society, considering both production and desires of consumers.

Simultaneous Consumption

A consumption pattern in which a product or service is consumed by multiple users at the same time without reducing its availability to others.