monetary policy


Definition
The regulation of the money supply and interest rates by a central bank, such as the Federal Reserve Board in the U.S., in order to control inflation and stabilize currency. Monetary policy is one the two ways the government can impact the economy. By impacting the effective cost of money, the Federal Reserve can affect the amount of money that is spent by consumers and businesses.


Related Terms

tight monetary policy -  More

easy monetary policy -  More

fiscal policy -  More

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monetary policy is ...

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