15
QuizMultiple Choice

Regulatory Policy

Question 15 • IL-Economics

Which best describes what a central bank uses monetary policy to do?

Answer
A
ensure that the government has a balanced budget
B
influence financial institutions globally
C
ensure that the government is sufficiently funded
D
steer the economy away from recession and toward growth

Explanation

A central bank uses monetary policy, such as changing interest rates or the money supply, to influence economic activity. These tools can help stabilize the economy and support growth, including steering it away from recession. Balancing the government’s budget or ensuring it has enough funding are fiscal policy responsibilities, not the main purpose of monetary policy.

AI-written and checked against the verified answer.

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