ACCA FM · Chapter 2 · Question 3 of 10
Which of the following best describes monetary policy?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Government or central bank action to influence the money supply, interest rates and credit
Explanation
Monetary policy operates through the money supply, interest rates, exchange rates and the availability of credit, and is often delegated to an independent central bank. Taxation and spending are fiscal policy, while regulation of monopolies (competition policy) and environmental rules are other forms of government intervention.
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