An entrepreneur is analyzing economic trends and government policy to decide when to start a new business creating goods that will be sold domestically. What type of government policy would be MOST beneficial for the entrepreneur?

Question

A.
a foreign policy eliminating tariffs on imported goods

B.
a monetary policy promoting the goal of price stability

C.
a tax policy increasing the tax rate on corporate income

D.
a regulatory policy facilitating the creation of monopolies

Answer 1

B. a monetary policy promoting the goal of price stability

A monetary policy that promotes price stability would help ensure that inflation remains low and predictable, creating a stable economic environment for the entrepreneur to operate in. This would help keep costs low and make it easier to plan for the future. Additionally, price stability would help boost consumer confidence and purchasing power, leading to increased demand for the entrepreneur's goods.