Monetary policy involves the government... a) taxing households. b) taxing businesses. c) adjusting levels of spending. d) adjusting interest rates.

Monetary policy is primarily managed by a country's central bank, such as the Federal Reserve in the United States. It uses tools like interest rate adjustments and open market operations to control money supply and stabilize the economy. When interest rates are lowered, borrowing becomes cheaper, encouraging spending and investment, while higher rates can help cool down an overheating economy. In the real world, you can see monetary policy at play during economic downturns or booms. For instance, during the 2008 financial crisis, many central banks slashed interest rates to stimulate the economy. Conversely, in times of rising inflation, they may hike rates to keep prices in check, showing how these adjustments directly influence daily financial decisions for households and businesses alike.