Submitted by mechanix19 on January 14, 2008

• Category: Miscellaneous
• Words: 1082
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Monetary Policy

Monetary policy is used by the government to control and influence the supply of money in the economy. Understanding this policy, and its influences, affects the way many people make financial decisions in our country today. Monetary policy is used to adjust macroeconomic factors like inflation, unemployment, interest rates, and gross domestic output (GDP). These factors will influence people’s decisions to spend on goods and services. To control these factors, the government uses tools such as the spread between the discount rate (DR) and the federal funds rate (FFR), the required reserve ratio, and the open market operations.
Understanding how money is created and destroyed...

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