Central Banks Can Use Monetary Policy to

question 144

Multiple Choice

Central banks can use monetary policy to

• A) reduce interest rates.
• B) decrease taxes.
• C) increase government spending.
• D) steer the economy out of every recession.
• E) prevent recessions.

---

Definitions:

Buyers

Persons or organizations that buy products or services for private consumption, for selling them again, or for manufacturing purposes.

Sellers

Individuals or businesses that offer goods or services for sale, contributing to the supply side of the market economy.

Excise Tax

A tax levied on the sale or consumption of specific goods or services, such as tobacco and alcohol.

Demand Shift

Occurs when there is a change in the quantity demanded at every price level, caused by factors other than the price of the good itself.