Which of the Following Is the Most Frequently Used Tool

question 158

Multiple Choice

Which of the following is the most frequently used tool of monetary policy?

• A)Changing the discount rate
• B)Changing reserve requirements
• C)Open-market operations
• D)Interest rate changes

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Definitions:

Returns to Scale

The change in output resulting from a proportional change in all inputs (factors of production) in the long run.

Inputs

Resources such as labor, materials, and capital that are used in the production process to create goods or services.

Output

The total amount of goods or services produced by a firm, industry, or economy over a certain period of time.

Isoquant

A curve that represents all the combinations of inputs that produce the same level of output in the production process.