Respuesta :
The federal reserve plays a large part in establishing monetary policy.
Monetary policy is a set of actions aimed at controlling a country's overall money supply and achieving economic growth. Monetary policy strategies include modifying interest rates and changing bank reserve requirements. Monetary policy is often classified as expansionary or restrictive. Central banks use monetary policy to manage the money supply in a country's economy.
With monetary policy, the Federal reserve increases or decreases the amount of money and credit in circulation, in an unrelenting effort to keep inflation, growth and employment on track. The objectives of monetary policy are to promote maximum employment, stable prices and forward interest rates. By implementing effective monetary policy, the Fed can keep prices stable, thereby supporting conditions for long-term economic growth and maximum employment.
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