PRC-3 · Chapter 19 · Question 3 of 17
Which of the following is NOT a standard tool used by a country's Central Bank to conduct Monetary Policy?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Changing the national income tax rates
Explanation
Changing tax rates and government spending is the domain of Fiscal Policy, managed by the government (Ministry of Finance), not Monetary Policy, which is managed by the Central Bank.
More Monetary Policy MCQs
- Q5The central bank increases the 'cash reserve ratio' (the percentage of deposits banks must keep in the vault and cannot lend out). What is…
- Q6The nation is suffering from soaring inflation. To cool down the economy, the Central Bank decides to use a contractionary monetary…
- Q7The Central Bank significantly lowers its benchmark discount rate (the rate it charges commercial banks to borrow money). What is the…
- Q8The Central Bank increases the 'Cash Reserve Ratio', requiring commercial banks to keep 20% of their deposits locked in vaults instead of…
- Q9Which of the following tools is exclusively the domain of Monetary Policy (managed by the Central Bank) rather than Fiscal Policy (managed…