Monetary policy includes adjustments in___________so as to change___________ .
A) the quantity of money; short-run aggregate supply
B) open market operations; long-run aggregate supply
C) the federal funds rate; aggregate demand
D) the federal funds rate; short-run aggregate supply

Question

Quizplus · Accepted Answer

Monetary policy involves the actions taken by a central bank, such as the Federal Reserve in the United States, to influence the economy. One of the primary tools of monetary policy is adjusting the federal funds rate, which is the interest rate that banks charge one another for overnight loans. By raising or lowering the federal funds rate, the central bank can influence the borrowing and spending habits of consumers and businesses, ultimately impacting aggregate demand in the economy. Therefore, the correct choice is C.

Monetary Policy Includes Adjustments In___________so as to Change___________

Monetary Policy Includes Adjustments In_so as to Change_