Monetary policy play to support economic growth

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Role which Monetary Policy Play to Support Economic Growth

and Employment Growth

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Role which Monetary Policy Play to Support Economic Growth and

Employment Growth

Introduction

The monetary policy is defined by the federal reserves as its

actions to influence the credit, and costs of money as well as its

availability. Since the expectations of market participants is critical in

determination of the economic growth and prices, the monetary policy

may also be defined to entail the statements, actions, policies, and

directives of the Feds that affect future perceptions. The Feds

implement the monetary policy through the open market operations

including the sale and purchase of the United States Treasury

securities. As from September 2007 the Feds in a series of almost ten

moves reduced its target fund to arrange of 0% to 0.25%

. Besides, the

feds have increased the mortgage-backed securities and unsterilized

purchase of the Treasury securities through the process known as

Quantitative Easing (QE).

Primarily, monetary policy determines the amount of money’s

size and growth, hence affecting the interest rates. Therefore,

Hetzel R. Does Monetarism Retain Relevance? (2015).

https://www.richmondfed.org/publications/research/economic_quarterly/201

2/q2/hetzel

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Term Paper Role which Monetary Policy Play to Support Economic Growth and Employment Growth Role which Monetary Policy Play to Support Economic Growth and Employment Growth Introduction The monetary policy is defined by the federal reserves as its actions to influence the credit, and costs of money as well as its availability. Since the expectations of market participants is critical in determination of the economic growth and prices, the monetary policy may also be defined to entail the statements, actions, policies, and directives of the Feds that affect future perceptions. The Feds implement the monetary policy through the open market operations including the sale and purchase of the United States Treasury securities. As from September 2007 the Feds in a series of almost ten moves reduced its target fund to arrange of 0% to 0.25%1. Besides, the feds have increased the mortgage-backed securities and unsterilized purchase of the Treasury securities through the process known as Quantitative Easing (QE). Primarily, monetary policy determines the amount of money’s size and growth, hence affecting the interest rates. Therefore, 1 Hetzel R. Does Monetarism Retain Relevance? (2015). https://www.richmondfed.org/publications/research/economic_quarterly/201 2/q2/hetzel monetary policy is often maintained through modification of the interest rates, bank reserves changes, buying or selling of the government bonds. On the other hand, economic growth is the rise in the economy? ...
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