ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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capital investment in research development
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interest rate policy
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the money supply
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bank credit control
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Detailed explanation-1: -Out of the given options, deficit financing is not a monetary tool.
Detailed explanation-2: -Answer and Explanation: Option b. The government lowers interest rates to make it cheaper for people and businesses to borrow money.
Detailed explanation-3: -Central banks have four main monetary policy tools: the reserve requirement, open market operations, the discount rate, and interest on reserves. 1 Most central banks also have a lot more tools at their disposal.
Detailed explanation-4: -The Fed has traditionally used three tools to conduct monetary policy: reserve requirements, the discount rate, and open market operations. In 2008, the Fed added paying interest on reserve balances held at Reserve Banks to its monetary policy toolkit.