The three main tools of monetary policy are ?
Correct answer: B. Open-market operations reserve requirements and the refinancing rate
- A. fiat, commodity and deposit money
- B. Open-market operations reserve requirements and the refinancing rate
- C. The money supply, government purchases and taxation
- D. Government expenditures taxation and reserve requirements
- E. Coin, currency and demand deposits
Explanation
The standard monetary-policy instruments are open-market operations, reserve requirements, and the central bank's policy or refinancing rate. The other choices list types of money or fiscal-policy tools such as taxation and government spending.
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