Question

Assess the following statements. Which one best describes monetary policy? (1 point)
• Monetary policy focuses on spending and taxation.
• Monetary policy was discredited in the 1970s.
• Monetary policy focuses on the money supply.
• Monetary policy tries to create the highest economic growth rate.

Answer 1

The statement that best describes monetary policy is:

• Monetary policy focuses on the money supply.

Monetary policy primarily involves managing the money supply and interest rates to influence economic activity, inflation, and employment levels.