What is the focus of monetary policy?

The focus of monetary policy is primarily on the management of the money supply and interest rates within an economy. This is accomplished through various tools and measures implemented by a central bank, such as adjusting the discount rate, setting reserve requirements for banks, and engaging in open market operations.

By influencing the amount of money circulating in the economy and altering interest rates, monetary policy aims to achieve macroeconomic objectives like controlling inflation, fostering economic growth, and promoting employment. An effective monetary policy can help stabilize the economy during times of recession or overheating by either encouraging spending and investment when money is plentiful or containing inflation when the money supply is reduced.

In contrast, the other options do not pertain to the primary goals or functions of monetary policy. For instance, the distribution of government expenditures is a matter of fiscal policy, which involves government spending and taxation decisions. Regulation of public services is related to a different aspect of economic governance and does not directly influence monetary dynamics. The control of labor unions pertains to labor market policies and the regulation of employment relations, which also fall outside the realm of monetary policy.