Which is the most widely used tool of monetary policy ?
Correct answer: B. Open-market operations
- A. Clearing house
- B. Open-market operations
- C. Discount rate
- D. Issuing of notes
Explanation
Open-market operations are widely used because the central bank can adjust the money supply and interest rates by buying or selling government securities. The discount rate is also a monetary-policy tool but is generally less direct.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
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.
Practise Macroeconomics
1,499 free Macroeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Macroeconomics questions
Open market Operation is ?
The branch banking system is in vogue in most countries of the world. In which country was it first developed?
What term is given to unemployment caused by a downturn in the business cycle ?
In which capacity does a person stand to gain from deflation ?
Which of the following is not an instrument of monetary policy ?
When banks prepare their balance sheets. They show the money lent in ?