Policy that tries to influence target variables by changing the interest rate is called
A)fiscal policy.
B)interest rate policy.
C)recession policy.
D)monetary policy.

Question

Quizplus · Accepted Answer

Monetary policy involves the use of interest rates to influence variables such as inflation, economic growth, and employment. The central bank adjusts interest rates to either stimulate or slow down spending and borrowing in the economy, thereby achieving its policy objectives. Hence, option D, monetary policy, is the correct answer.

Policy That Tries to Influence Target Variables by Changing the Interest