Question

(_1_) policy is the actions taken by the (_2_) to influence the real GDP and the inflation rate in the economy.

First blank options: Economic, Fiscal, Monetary

Second blank options: Federal Reserve, government, Reserve Bank

Answer 1

Answer: (1) Monetary (2) Federal Reserve

Step-by-step explanation:

Monetary policy

Monetary policy establishes the link between the inflation rate and aggregate expenditure that determines the slope of the AD curve. Central banks set interest rates to control the inflation rate based on an inflation rate target.