A government's monetary policy is its plan to control?

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28-04-2016
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A government's monetary policy is its plan to control?

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meerkat18 meerkat18 · Answer 1 · 2016-05-03T20:35:45+02:00

If the choices given were:
A. taxation
B.prices
C.workers' wages
D.the money supply

Then, a government's monetary policy is its plan to control D. THE MONEY SUPPLY.

The monetary policy has influence on the supply of money that circulates in the economy. It also influences the credit within the U.S. economy.

Monetary policy changes the amount of money and credit in the economy. It affects interest rates and the performance of the economy.

AkshayG AkshayG · Answer 2 · 2020-03-13T05:36:06+01:00

The government's monetary policy is its plan to control the money supply in the economy.

Further Explanation:

Monetary policies:

Monetary policies are the policies made by the central bank on behalf of the government. The monetary policies are issued and implemented in order to maintain the supply of money, interest rate, inflation, growth in the economy. Following are the objective of the monetary policy:

1. Management of inflation.

2. Reduction in the unemployment

3. Promotion of the moderate long-term interest rates

Explain the parameters controlled by monetary policies:

The government tends to control the money supply in the economy by implementing monetary policies. The money supply refers to the circulation of the money and other liquid instruments in the economy. The increase in the money supply will result in inflation or hyperinflation, and the decrease in the money supply will lead to deflation. Therefore, the government of an economy tends to manage the supply of money to maintain the growth of the economy through the use of monetary policies.

Thus, a government's monetary policy is its plan to control money supply in the economy.

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Answer Details:

Grade: Senior school

Chapter: Monetary policies

Subject: Economics

Keywords: government, monetary, policy, plan, control, demand, and supply, inflation, deflation, management, central bank.