Which scenario is an example of the government changing its monetary policy?

Question

(1 point)
Responses

the federal government sending stimulus payments to low-wage earners

the federal government sending stimulus payments to low-wage earners

Montana cutting spending to its school systems due to recession

Montana cutting spending to its school systems due to recession

Congress increasing the tax rate on higher-wage earners

Congress increasing the tax rate on higher-wage earners

the Federal Reserve increasing interest rates to fight inflation

the Federal Reserve increasing interest rates to fight inflation

Answer 1

The scenario that is an example of the government changing its monetary policy is:

the Federal Reserve increasing interest rates to fight inflation.

Monetary policy refers to the actions taken by a country's central bank (in this case, the Federal Reserve) to control the money supply and influence interest rates to achieve macroeconomic goals such as controlling inflation, maximizing employment, and stabilizing currency.