Overview
Monetary policy frameworks are essential tools used by central banks to manage economic stability. They involve strategies to control the money supply and interest rates, aiming to achieve goals like low inflation and high employment. Understanding these frameworks helps us grasp how economic polici...
Key Terms
Example: The Federal Reserve uses monetary policy to influence economic activity.
Example: A 2% inflation rate means prices increase by 2% over a year.
Example: A higher interest rate can discourage borrowing.
Example: The Bank of Japan implemented quantitative easing to combat deflation.
Example: Lowering interest rates is an expansionary policy.
Example: Raising interest rates is a contractionary policy.
Related Topics
Fiscal Policy
The use of government spending and taxation to influence the economy.
intermediateEconomic Indicators
Statistics that provide information about economic performance and trends.
intermediateBanking System
The network of institutions that provide financial services and manage money supply.
intermediateKey Concepts
Inflation targetingInterest rate policyQuantitative easingExchange rate policy