Which policy type deals specifically with the control of the money supply?

Prepare for the DECA Economics Exam. Study with interactive quizzes, multiple choice questions, hints, and detailed explanations. Get ready to excel on your test!

Monetary policy is specifically focused on the control of the money supply within an economy. It is implemented by a country's central bank, which uses various tools to influence interest rates and the availability of money and credit. The primary goals of monetary policy include managing inflation, controlling employment levels, and stabilizing the currency. By adjusting the money supply, the central bank can influence economic activity; for instance, lowering interest rates can stimulate spending and investment, while raising rates can help control inflation.

In contrast, fiscal policy pertains to government spending and tax policies, which are aimed more at influencing the economy through budgetary measures rather than directly manipulating the money supply. Regulatory policy involves rules and regulations that govern business practices, while trade policy focuses on the international trade of goods and services, including tariffs and trade agreements. Thus, monetary policy is the distinct approach centered on the money supply, making it the correct answer in this context.

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