Which of the Following Is a Tool of Monetary Policy

question 114

Multiple Choice

Which of the following is a tool of monetary policy?

• A) open-market operations
• B) changes in banking laws
• C) changes in tax rates
• D) changes in government spending

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Definitions:

Discretionary Monetary Policy

Monetary policy actions that are based on the judgment of policymakers rather than set by predetermined rules, allowing flexibility in response to economic conditions.

Capitalistic Economy

An economic system where trade, industry, and the means of production are largely or entirely privately owned and operated for profit.

Government Intervention

Refers to actions taken by a government to affect the economy or society, which can include regulations, subsidies, taxes, and other policies designed to influence economic activities.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income, property, or sales.