Which of the Following Is NOT a Tool of Monetary

question 188

Multiple Choice

Which of the following is NOT a tool of monetary policy?

• A)open-market operations
• B)reserve requirements
• C)changing the bank rate
• D)increasing the deficit

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Definitions:

Time Inconsistency

A situation in which a decision-maker's preferences change over time in such a way that what is initially considered preferable is no longer so at a later date.

Monetary Policy

Economic policy laid out by the central bank, involving management of money supply and interest rates to control inflation and ensure economic stability.

Reducing Inflation

Methods and policies implemented by governments or central banks to slow down the rate at which prices for goods and services increase.

Permanent Scars

Long-term damage or impact left on the economy or individual sectors by significant events, such as financial crises or pandemics.