Monetary Policy

question 79

Multiple Choice

Monetary policy:

• A) Is controlled by Congress.
• B) Refers to the use of government spending.
• C) Shifts the aggregate supply curve.
• D) Is controlled by the Federal Reserve.

---

Definitions:

Federal Reserve

The central banking system of the United States, responsible for monetary policy, regulation of the banking industry, and stability of the financial system.

Interest Rates

The cost of borrowing money or the return on invested capital, expressed as a percentage of the principal, affecting economic activity by influencing spending and saving behaviors.

Unemployment

The situation in which individuals who are capable of working and are seeking work are unable to find employment.

Marginal Propensity

The ratio of change in an economic variable (such as consumption) that occurs with a change in another variable (such as income).