DISCUSS HOW THE TOOLS OF MONETARY POLICY OPERATE TO HELP INFLUENCE THE ECONOMIC GOALS OF LOW UNEMPLOYMENT AND INFLATION
Monetary policy is the tool that is usually used by the government to control the flow of money in the economy for the purposes of making sure that the business cycle stabilizes hence reducing the problems of unemployment and inflation. This was initially undertaken by either printing more or less paper currency but in the modern economies, it is undertaken by controlling the money creation process through the fractional reserve banking (Slavin, 2013). Monetary policy comes in two varieties the first being expansionary monetary policy which increases money supply and lowers interest rates and the contra-dictionary policy which decrease Continue reading...
