Question

How does the Fed affect monetary policy?

A) it regulates the supply of money
B) it determines tax rates
C) it maintains the gold standard
D) it evaluates financial business practices

Answer 1

i believe its A because the FED affects monetary polices by the long terms interest rates,the total amount of money and credit in the economy.

Answer 2

A) it regulates the supply of money.

Step-by-step explanation:

When the government implements a monetary policy, it has influence over economic activity, particularly through the manipulation of money and credit supplies as well as the alteration of interest rates. The most common purposes for carriying out this policy are:

• To sustain or make full employment possible.
• To support or keep high levels of economic growth.
• To make prices and salaries achieve stability.

Before the twentieth century, monetary policy was broadly considered almost useless to excercise influence over the economy. This changed after WWII, when governments started implementing measures to decrease inflation by regulating money supply.