Which institution sets monetary policy for the entire Eurozone?

• A. Federal Reserve
• B. Bank of England
• C. European Central Bank
• D. Bank of Japan

Answer: (C)

The institution that sets monetary policy for the entire Eurozone is the European Central Bank. The ECB is responsible for steering policy across all euro-area countries, aiming to maintain price stability by deciding key interest rates and conducting money-market operations in coordination with the national central banks that belong to the Eurosystem. This centralized approach ensures uniform monetary policy for all countries using the euro. The other institutions operate in different regions: the Federal Reserve governs the United States, the Bank of England serves the United Kingdom (which does not use the euro), and the Bank of Japan runs Japan’s monetary policy.