There are three
'links' in the chain
between monetary
policy, inflation,
and GDP. Which
could be
considered the
first 'link' or step in
the chain?
A. Increasing taxes
B. Raising interest rates
C. Controlling inflation

Respuesta :

The correct alternative is letter C. Inflation control. This is the first strategy to control the currency in the economy, being one of the main objectives of monetary policy in a country.

What is monetary policy?

It is the set of governmental strategies and actions to interfere in the investment market and in the consumption power of citizens, through the control of the basic interest rate of the economy, which is an instrument capable of influencing the value of a currency and the prices of goods. consumption, thus generating a control over inflation in search of economic balance in a country.

Therefore, controlling inflation is a short-term measure that generates a series of impacts on an economy, such as fiscal and monetary contraction measures, such as increasing taxes and reducing public spending.

Find out more about monetary police here:

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