Question

Active monetary policy

Answer 1

Answer:

Active monetary policy

d. is the strategic use of monetary policy to counteract macroeconomic expansions and contractions.

Explanation:

• The option a is not correct as when central banks purposefully choose to only stabilize money and prices levels through monetary policy, then this policy is called as passive monetary policy.
• The option b is not correct as it has effect on the economy but not in long run.
• The option c is not correct as when central banks take orders from the ruling party on how to conduct monetary policy then it is not an active monetary policy.
• The option e is not correct as when central bank use only fiscal policy to try to influence the economy can or can't be active monetary policy.
• The option d is correct as the active monetary policy is used to counter the changing economic conditions.