What is the primary focus of monetary policy?

Monetary policy primarily focuses on the management of interest rates and the money supply within an economy. This policy is implemented by a country's central bank and aims to influence economic activity, control inflation, stabilize the currency, and achieve sustainable economic growth. By adjusting interest rates, the central bank can either encourage borrowing and spending (through lower rates) or cool down an overheating economy (by raising rates).

Additionally, managing the money supply involves regulating how much money is available in the economy, which can affect inflation rates, employment levels, and overall economic stability. Effective monetary policy is crucial for maintaining a healthy economy, which makes it a central function of economic governance.

Other options, while important aspects of economic policy, do not specifically relate to monetary policy; they pertain to fiscal policy or regulatory measures rather than the direct control of money and credit in the economy.