Final answer:
Monetary policy involves the central bank's management of money supply and interest rates, not taxes, to influence the economy. Fiscal policy is the strategy regarding taxing and government spending decisions to achieve economic goals.
Step-by-step explanation:
The statement that monetary policy consists of changes in the money supply and/or taxes to achieve certain economic goals is false. Monetary policy is a strategy employed by a central bank, like the Federal Reserve in the United States, to regulate the supply of money primarily through operations that influence interest rates and credit conditions. It can be expansionary to counter recessions by increasing the money supply and reducing interest rates, or contractionary to combat inflation by reducing the money supply and raising interest rates. Fiscal policy, on the other hand, involves government decisions on taxing and spending and is executed by public officials or legislatures, not by the central bank.
Fiscal policy might aim to reduce the budget, which consists of mandatory and discretionary spending, and can be adjusted alongside changes in taxes. Thus, when discussing changes in the economy via taxing, we're referring to fiscal policy, not monetary policy. The Federal Reserve and other central banks may target inflation, employ quantitative easing, and manage interest rates to guide economic outcomes. These actions can help to stimulate the economy or rein in inflation, depending on the goals most pertinent at the time. However, monetary policy does not directly involve taxation.