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A central bank is concerned that inflation rates are rising too quickly. In order
to reduce the available money supply, it orders banks to set aside a greater
percentage of their deposits than previously required.
This action best illustrates the central bank's use of which tool of monetary
policy?
O A. Reserve requirements
O B. Interest on reserves
O C. Discount rate
D. Open market operations
SUBMIT

Respuesta :

Answer:

reserve requirements

Explanation:

ap3x aproved

The correct option is A). Reserve requirements.

Which monetary policy mainly used by central bank?

Central bank mainly used four monetary policy tools which are the reserve requirement, open market operations, the discount rate, and interest on reserves.

Central banks follows monetary policy by adjusting the supply of money, mainly through open market operations.

The bank may also reduce the money amount by selling government bonds under a ā€œsale and repurchaseā€ agreement.

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