Monetary Policy

Loading the player...

Monetary policy is a central bank’s actions that influence the country’s money supply and the overall economy. In the United States, the Federal Reserve establishes monetary policy.  It tries to make sure the money supply grows neither too quickly, causing excessive inflation, nor too slowly, hampering economic growth. Ideally, inflation is 2% to 3% annually, which keeps prices stable. The Fed also tries to keep unemployment low, around 5%.

 

comments powered by Disqus
Related Articles
  1. The Taylor Rule: An Economic Model For Monetary Policy
    Economics

    The Taylor Rule: An Economic Model For Monetary Policy

  2. How Monetary Policy Affects Your Investments
    Economics

    How Monetary Policy Affects Your Investments

  3. A Look At Fiscal And Monetary Policy
    Economics

    A Look At Fiscal And Monetary Policy

  4. How The U.S. Government Formulates Monetary Policy
    Personal Finance

    How The U.S. Government Formulates Monetary Policy

  5. Monetary Policy
    Term

    Monetary Policy

  6. Accommodative Monetary Policy
    Term

    Accommodative Monetary Policy

  7. Tight Monetary Policy
    Term

    Tight Monetary Policy

Trading Center