Which of the following is a tool of monetary policy?

Monetary policy primarily involves managing the economy's money supply and interest rates to achieve macroeconomic objectives such as controlling inflation, managing employment levels, and stabilizing the currency. One of the primary tools of monetary policy is adjusting the money supply, which central banks, such as the Federal Reserve in the United States, carry out through various mechanisms.

By increasing or decreasing the money supply, a central bank can influence interest rates; for example, increasing the money supply typically lowers interest rates, encouraging borrowing and investing, which can stimulate the economy. Conversely, decreasing the money supply can raise interest rates, potentially cooling an overheated economy.

In contrast, government subsidies and changing tax rates pertain to fiscal policy, which is the use of government spending and tax policies to influence economic conditions. Regulating income distribution does not directly relate to monetary policy and instead focuses on the broader economic and social policies that affect how income is allocated among the population. These differences underline why adjusting the money supply is categorized distinctly as a tool of monetary policy.