Practice Quiz

Financial Planner

Category - General Principles of Financial Planning

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What determines the size and rate of growth of the money supply that affects interest rates?
  1. Price Stability Policy
  2. Monetary Policy
  3. Consumers Policy
  4. Fiscal Policy
Explanation
Answer: B - Monetary Policy determines the size and rate of growth of the money supply that affects interest rates. Monetary policy is maintained through actions such as increasing the interest rate, or changing the amount of money banks need to keep in reserve. These actions are attempts to control the economy and inflation.
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