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Which best describes what a central bank uses monetary policy to do?
ensure that the government has a balanced budget
influence financial institutions globally
ensure that the government is sufficiently funded
steer the economy away from recession and toward growth
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steer the economy away from recession and toward growth
Monetary policy (adjusting interest rates, reserve requirements, open-market operations) is used by central banks to stabilize inflation, support employment, and smooth economic cycles — e.g., stimulate growth during recessions or cool an overheating economy. The other choices describe fiscal policy (government budgets) or are not primary central bank goals.
Monetary policy (adjusting interest rates, reserve requirements, open-market operations) is used by central banks to stabilize inflation, support employment, and smooth economic cycles — e.g., stimulate growth during recessions or cool an overheating economy. The other choices describe fiscal policy (government budgets) or are not primary central bank goals.
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