Assertion (A): Monetary policy is decided by the central bank, while fiscal policy is decided by the government.
Reason (R): Fiscal policy uses taxes and government spending; monetary policy uses money supply and interest rates.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

Both statements are true.
R describes what each policy uses; it does not explain why different bodies decide them. So R is not the explanation of A.

Concept: Monetary and fiscal policy
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsEasing and tightening

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Ten questions from The Central Bank & Monetary Policy, at your own pace.

Assertion (A): Monetary policy is decided by the central bank, while fiscal policy is decided by the government.Reason (R): Fiscal policy uses taxes and government spending; monetary policy uses money supply and interest rates.

Explanation

Assertion (A): Monetary policy is decided by the central bank, while fiscal policy is decided by the government.
Reason (R): Fiscal policy uses taxes and government spending; monetary policy uses money supply and interest rates.