Monetary policy
A)must be described in terms of interest-rate targets.
B)must be described in terms of money-supply targets.
C)can be described either in terms of the money supply or in terms of the interest rate.
D)cannot be accurately described in terms of the interest rate or in terms of the money supply.

Question

Quizplus · Accepted Answer

Monetary policy can be described either in terms of the money supply (how much money is in the economy) or in terms of the interest rate (the cost of borrowing money). Central banks may focus on controlling the supply of money to influence economic activity or may target interest rates to achieve their economic objectives.

Monetary Policy