Government policies that focus on changing interest rates are called ?
Correct answer: B. monetary policies
- A. fiscal policies
- B. monetary policies
- C. supply-side policies
- D. incomes policies
Explanation
Monetary policy uses instruments such as interest rates, money supply, and open-market operations to influence economic activity. Fiscal policy instead changes government spending and taxation.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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