Monetary policy regulates money supply and interest rates via central banks

Steps:

• Define monetary policy as tools used by central banks to influence economic activity through money supply and interest rates.
• Review choices to identify actions directly tied to central bank control over borrowing costs or liquidity.
• Eliminate options involving government taxation or regulation, which fall under fiscal policy.
• Confirm the remaining option aligns with standard monetary tools like rate adjustments.

Why B is correct:

• Monetary policy includes central bank decisions to lower interest rates, stimulating borrowing and spending per the transmission mechanism in macroeconomics.

Why the others are wrong:

• A: Corporation tax cuts are fiscal policy, enacted by governments to affect business incentives.
• C: Switching tax types is fiscal policy, adjusting revenue collection without impacting money supply.
• D: Price controls are regulatory interventions, not central bank actions on monetary conditions.

Final answer: B