Monetary policy effects the _________ and __________?
Correct answer: B. money supply, interest rate
- A. reserve, unemployment
- B. money supply, interest rate
- C. taxes, exchange rate
- D. stock price, minimum wage
Explanation
The main operating variables of monetary policy are the money supply and interest rates. Central banks alter these to influence borrowing, investment, aggregate demand, employment, and inflation.
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About Macroeconomics
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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