Monetary policy is thought to be:
A)equally effective in moving the economy out of a recession as in controlling inflation.
B)more effective in moving the economy out of a recession than in controlling inflation.
C)only effective in moving the economy out of a recession.
D)more effective in controlling inflation than in moving the economy out of a recession.

Question

Quizplus · Accepted Answer

Monetary policy is generally considered more effective in controlling inflation because it can directly influence interest rates and money supply, which affect inflation levels. However, its impact on stimulating economic growth during a recession can be limited by factors like liquidity traps or low consumer confidence.

Monetary Policy Is Thought to Be