Asked by Anneiry de la cruz on Jul 29, 2024
Verified
Monetary policy includes all of the following,except
A) changes in government spending on goods and services.
B) changes in reserve requirements.
C) changes in the discount rate.
D) buying and selling government securities on the open market.
Government Spending
Expenditures by government agencies on goods and services that influence the economy, including investments, social services, and defense.
Reserve Requirements
The minimum amount of funds that a bank is required to hold in reserve, determined by central banking authorities, to ensure that the institution remains liquid.
- Comprehend the duties and operations of the Federal Reserve in controlling monetary circulation.
- Understand the effects of monetary policy on economic performance, focusing on inflation, interest rates, and real GDP.
- Determine the mechanisms used by the Federal Reserve in the implementation of monetary policy.
Verified Answer
ZK
Zybrea KnightAug 03, 2024
Final Answer :
A
Explanation :
Monetary policy refers to the actions taken by a central bank to regulate the money supply and interest rates to achieve macroeconomic goals. Changes in government spending on goods and services fall under fiscal policy, which is the domain of the government's fiscal authority, not the central bank's monetary authority. The other options, including changes in reserve requirements, changes in the discount rate, and buying and selling government securities on the open market, are all tools utilized by the central bank to implement monetary policy.
Learning Objectives
- Comprehend the duties and operations of the Federal Reserve in controlling monetary circulation.
- Understand the effects of monetary policy on economic performance, focusing on inflation, interest rates, and real GDP.
- Determine the mechanisms used by the Federal Reserve in the implementation of monetary policy.