Monetary policy is often about changing expectations and perceptions rather than just manipulating numbers and equations
Monetary policy is introduced by the government to influence economic activity. It is directly linked to the supply chain of money and credit cards. It also affects rates of interest.
Monetary policy is best explained by two know terms, expansionary and contractionary.
Whenever the monetary policy targets to grow the economy of a country it is known to be expansionary. Generally there are three main tools that are used to target monetary policies. Their names are open market operations, discounted prices and maintained requirements.
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