Description
Should we call Ghostbusters or 911 (the emergency number), if the flow of money becomes sluggish within our macroeconomy? In this activity, you will explore the concepts of monetary policy, monetary policy tools, and expansionary and contractionary monetary policy.
Locate a recent article (published within the last year) that discusses the objectives of the Federal Reserve Banking System, monetary policy tools and how they work, and whether the Federal Reserve Banking System is using expansionary or contractionary monetary policy.
You can use the Hunt Library, newspapers, new stations, or other credible sources to locate an article. Analyze the article and then provide the following in your discussion.
Define the term monetary policy tools.
Explain how each monetary policy tool is used.
Provide an example of a real-life application in which the Federal Reserve Banking System would use contractionary monetary policy over expansionary monetary policy.
Discuss which monetary policy is used most often and why.
Summarize your findings using at least 250 words and provide a minimum of one reference. Use current APA formatting to document your sources.
Explanation & Answer
Attached.
Monetary policy
Name
Course
Institution
Date
1
Monetary policy
Monetary policy
Monetary policy is an action undertaken by the central bank so as to control the supply of
money or the costs of short term borrowing in the economy. It is meant to ensure that supply of
money in the economy is consistent with growth so as to keep the economy healthy. Monetary
policy usually target interest rates or inflation in order to have complete trust in the currency and
also ensure there is stability of prices so as to achieve macroeconomic objectives such as
consumption, liquidity and grow...
Review
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