An example of monetary policy is an increase in by the , which aggregate demand.
A) the quantity of money; government; increases
B) the quantity of money; Federal Reserve; decreases
C) the quantity of money; Federal Reserve; increases
D) taxes; government; increases

Question

Quizplus · Accepted Answer

Monetary policy involves the management of the quantity of money in circulation to influence economic activity. The Federal Reserve is responsible for implementing monetary policy in the United States, and it can increase or decrease the quantity of money in circulation through various tools, such as buying or selling government securities. An increase in the quantity of money in circulation would result in an increase in aggregate demand. Therefore, choice C is the best answer.

An Example of Monetary Policy Is an Increase in by the