Monetary policy a. must be described in terms of interest-rate targets. b. can be described either in terms of the money supply or in terms of the interest rate. c. must be described in terms of money-supply targets. d. cannot be accurately described in terms of the interest rate or in terms of the money supply.

Question

Social Studies

Finley Hinton

30 April, 10:49

Monetary policy a. must be described in terms of interest-rate targets. b. can be described either in terms of the money supply or in terms of the interest rate. c. must be described in terms of money-supply targets. d. cannot be accurately described in terms of the interest rate or in terms of the money supply.

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Edith · Answer 1

The answer is B. Can be described either bin terms of the money supply or in terms of the interest rate.

Explanation:

The central bank is regarded as the highest financial institution of a country, and it is empowered to regulate the cash flow and money supply to the public. The regulation of the cash flow in public when there is economic recession, high rate in unemployment and inflation to ensure stability in price is known as monetary policy.

Monetary policy is of two types.

* Contradictory monetary policy ... this is adopted when inflation is on the high side.

* Expansion monetary policy ... it is adopted when unemployment is on the high side and when the economy is on recession.