Fiscal Policy
Monetary Policy
Industrial Policy
Foreign Exchange Policy
Answer is Wrong!
Answer is Right!
The correct answer is: B. Monetary Policy
Monetary policy is the process by which a central bank controls the supply of money in an economy. The central bank can use monetary policy to influence interest rates, inflation, and economic growth.
The central bank can influence savings, investments, and consumer spending by changing interest rates. When interest rates are low, it is cheaper to borrow money. This encourages people to borrow money to buy homes, cars, and other goods and services. It also encourages businesses to borrow money to invest in new projects. When interest rates are high, it is more expensive to borrow money. This discourages people from borrowing money and businesses from investing.
The central bank can also influence savings, investments, and consumer spending by buying and selling
11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z"/>
Subscribe on YouTube
government bonds. When the central bank buys government bonds, it injects money into the economy. This can lead to higher inflation and higher interest rates. When the central bank sells government bonds, it takes money out of the economy. This can lead to lower inflation and lower interest rates.
Fiscal policy is the use of government spending and taxation to influence the economy. The government can use fiscal policy to stimulate the economy by increasing spending or cutting taxes. The government can also use fiscal policy to slow down the economy by decreasing spending or raising taxes.
Industrial policy is the government’s use of subsidies, tariffs, and other measures to promote the development of certain industries. The government may use industrial policy to protect domestic industries from foreign competition or to encourage the development of new technologies.
Foreign exchange policy is the government’s use of exchange rates, tariffs, and other measures to influence the value of its currency. The government may use foreign exchange policy to promote exports or to protect domestic industries from foreign competition.