Select the option that correctly shows all the missing words in the following sentence.Monetary policy is the management of ________ by changing money _______ for the purpose of adjusting aggregate _____.

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Question: Select the option that correctly shows all the missing words in the following sentence.Monetary policy is the management of ________ by changing money _______ for the purpose of adjusting aggregate _____.

Option a: cash rate, demand, supply. This option reverses the typical order of the terms. Monetary policy is not described as managing cash rate by changing money demand; and the final blank would be about aggregate demand, not supply, which makes this choice inconsistent.

Option b: cash rate, supply, demand. This choice uses cash rate as the instrument, which aligns with common macroeconomics terminology where the central bank sets or influences the cash rate. It then mentions changing money supply, which is the usual transmission mechanism, and aims to adjust aggregate demand, the standard macroeconomic objective. This option fits the conventional structure and meaning of monetary policy.

Option c: exchange rates, supply, demand. While exchange rates can be influenced by monetary policy, the typical central instrument is not described as setting or changing exchange rates in the same direct way as the cash rate. The middle blank would imply money is used to affect exchange rates, which is not the standard phrasing for this definition. The final blank demand could be argued, but the overall phrasing is less conventional than option b.

Option d: long-term interest rates, supply, demand. Long-term interest rates are impacted by monetary policy, but the common phrasing centers on the short-term policy instrument (the policy rate or cash rate) rather than “long-term interest rates.” The sequence would also be unusual if it suggested changing long-term rates to influence aggregate demand directly in this exact wording. This makes it a weaker fit than option b.

In summary, each option attempts to fill the blanks with plausible macroeconomic terms, but option b aligns best with standard definitions: the instrument is the cash rate, the policy affects money supply, and the goal is to influence aggregate demand. The other options either alter the typical instrument, swap the order of the terms, or use phrasing that is less consistent with conventional monetary-policy descriptions.

Select the option that correctly shows all the missing words in the following sentence.Monetary policy is the management of ____ by changing money _ for the purpose of adjusting aggregate ___.单项选择题

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Select the option that correctly shows all the missing words in the following sentence.Monetary policy is the management of ________ by changing money _______ for the purpose of adjusting aggregate _____.单项选择题