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Economic policies

The actions of a central bank, currency board, or other regulatory committee that determine the size and rate of growth of the money supply.

What is monetary policy? The actions of a central bank, currency board, or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates.

Monetary policy is maintained through actions such as increasing the interest rate or changing the amount of money banks need to keep in the vault bank reserves. In the United States, the Federal Reserve is in charge of monetary policy.

Monetary policy is one of the ways that the US government attempts to control the economy. If the money supply grows too fast, the rate of inflation will increase. If the growth of the money supply is slowed too much, then economic growth may also slow.

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Fundamentals of Economics

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