Which of the following is not a main tool of monetary policy?

Monetary policy primarily involves the actions taken by a central bank to manage the money supply and influence interest rates in the economy. The primary tools used in this process include open market operations, reserve requirement adjustments, and changes to the discount rate.

Open market operations refer to the buying and selling of government securities in the open market to regulate the money supply. By purchasing securities, the central bank injects liquidity into the economy, while selling securities removes liquidity.

Adjustments to the reserve requirement involve changing the amount of funds that banks must hold in reserve against deposits. A lower reserve requirement allows banks to lend more, increasing the money supply, while a higher requirement restricts lending.

The discount rate changes involve the interest rate charged to commercial banks for short-term loans from the central bank. Lowering the discount rate makes borrowing cheaper for banks, which can then lend more to consumers and businesses, stimulating economic activity.

In contrast, trade balance modifications do not fall under the realm of monetary policy. Instead, they pertain more to fiscal policy and international economics, involving aspects such as tariffs, quotas, and exchange rates. These factors influence how much a country exports or imports, impacting its trade balance but not directly affecting the money supply or interest rates controlled by the