What Is Monetary Policy?


Quick Answer

Monetary policy is a practice used by the Federal Reserve in the United States. This practice is what is used to influence the amount of credit and money that is available in the United States economy. Monetary policy can also affect interest rates in the United States.

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Full Answer

The practice of monetary policy may also be used in various countries throughout the world. It is designed to control the flow of money throughout a country's economy. There are two types of monetary policy: expansionary, which increases the amount of money in the economy, and contractionary, which reduces the amount of money in the economy.

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