Directions: Read the following paragraph and answer the questions below.

Monetary tools and policies are mechanisms used by central banks to control the supply of money in an economy, aiming to maintain economic stability and growth. They include measures such as adjusting interest rates, conducting open market operations, and altering reserve requirements. For example, a central bank might lower interest rates to stimulate borrowing and investment or sell securities in the open market to decrease the money supply. Understanding these tools is crucial to the study of macroeconomics and fiscal policy.