Monetary policy includes changes in: (A)Government spending.(B)Production incentives.(C)Reserve requirements.(D)All of the above.
Npgm158 or SYshk or Sharp or whoever,
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my answer - (C); others look part of fiscal policy
Yes, all of the above.
To determine the correct answer, let's break down the options:
A) Government spending: This refers to the amount of money that the government allocates towards various sectors of the economy, such as infrastructure, education, healthcare, defense, etc. Changes in government spending can have an impact on the overall economy, but it falls under fiscal policy rather than monetary policy. Therefore, it is not a part of monetary policy.
B) Production incentives: Production incentives are measures taken by the government to encourage businesses to increase production and stimulate economic growth. These can include tax breaks, subsidies, or grants. However, production incentives are also a part of fiscal policy, not monetary policy.
C) Reserve requirements: Reserve requirements are regulations set by the central bank (in the United States, this is the Federal Reserve) that determine the amount of funds that banks must hold in reserves against customer deposits. Alterations to reserve requirements can affect the amount of money that banks have available for lending, which in turn impacts the supply of money in the economy. So, reserve requirements are indeed a key tool of monetary policy.
D) All of the above: Since government spending and production incentives are part of fiscal policy, not monetary policy, the correct answer is not (D) "All of the above." Instead, the correct answer is (C) "Reserve requirements."