Question on: JAMB Economics - 2019

The correct answer is credit ceiling. Here's why: * **Credit ceiling:** This is a monetary policy tool directly used by the central bank to limit the amount of credit commercial and merchant banks can extend to the domestic economy. It sets a maximum limit on lending. * **Monetary policy:** This is the broader set of actions undertaken by the central bank to manipulate the money supply and credit conditions to stimulate or restrain economic activity. While credit ceilings are part of monetary policy, they are not the policy itself. * **Fiscal policy:** This involves government spending and taxation, not the central bank's control over bank credit. * **Open market operation:** This is a tool of monetary policy where the central bank buys or sells government securities to influence the money supply. While open market operations can affect