Which of the Following Is Not a Tool of Monetary

question 43

Multiple Choice

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

• A)an increase in the target overnight rate
• B)an open market purchase of bonds
• C)changes in tax rates
• D)an open market sale of bonds
• E)a decrease in the target overnight rate

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Definitions:

Net Investment

The difference between total investment in an economy and the depreciation of capital.

Depreciation

The process by which capital assets lose value over time due to use, wear and tear, or obsolescence.

Capital Stock

The total amount of physical goods or financial assets that a company possesses which are used in the production of goods and services.

Gross Investment

The total amount of money spent on capital assets before accounting for depreciation.