Which policy is primarily concerned with regulating the quantity of money in circulation within the economy?

Monetary policy is the mechanism through which a nation's central bank, such as the Federal Reserve in the United States, manages the supply of money and interest rates in order to achieve specific economic goals, such as controlling inflation, managing employment levels, and ensuring financial stability. This policy directly influences the amount of money available in the economy, which in turn affects spending, investment, and overall economic activity.

The tools of monetary policy include open market operations, discount rates, and reserve requirements, each of which can either increase or decrease the money supply. For example, by purchasing government securities, the central bank can inject liquidity into the economy, whereas selling securities can withdraw money from circulation.

Other options relate to different aspects of economic management. Economic policy encompasses a broader range of strategies, including both monetary and fiscal elements. Fiscal policy specifically refers to government spending and taxation decisions to influence the economy, while regulatory policy focuses on the establishment of rules and regulations to control specific economic activities but does not directly address the money supply. Understanding these distinctions clarifies why monetary policy is uniquely designed to regulate the quantity of money in circulation.