Economics 9708 · AS & A Level · Monetary policy

Monetary policy — practice question

The government asks a central bank to assist in maintaining price stability. If inflation increases sharply, which policy would not be under the central bank's direct control?

  • Aincreasing the rate of interest to reduce consumer spending
  • Bmanaging a reduction of the money supply
  • Cusing credit restrictions to regulate lending by commercial banks to households
  • Drestricting wage increases in the private and public sectors

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