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Monetary policy. Public finance. Monetary policy is the process by which the monetary authority of a country, typically the central bank or currency board, controls either the cost of very short-term borrowing or the monetary base, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.What is the meaning and objectives of monetary policy?
According to European Central Bank, the basic objective of monetary policy is to improve price stability and achieve a high level of employment in the economy. Monetary policy also serves as a tool to stimulate economic growth during recessions and reduce price inflation.What is the purpose of monetary policy?
Monetary policy. Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment.