Monetary policy is the manipulation of the supply of money in private hands by which the government can control the economy. Monetarists believe that having too much cash and credit in circulation generates inflation. (Edwards 555)
Furthermore, monetary policy is the government's main economic policy. An economic theory called monetarism holds that the supply of money is the key to the nation's economic health. Monetarists essentially advise holding the growth in money supply to the rise in the GDP. Politicians worry constantly about the money supply because it affects the rate of interest their constituents have to pay for home loans, new cars, starting up new businesses, and so on. (Edwards, 555)
Monetary policy is the manipulation of the supply of money in private hands by which the government can control the economy. Monetarists believe that having too much cash and credit in circulation generates inflation. (Edwards 555)
ReplyDeleteFurthermore, monetary policy is the government's main economic policy. An economic theory called monetarism holds that the supply of money is the key to the nation's economic health. Monetarists essentially advise holding the growth in money supply to the rise in the GDP. Politicians worry constantly about the money supply because it affects the rate of interest their constituents have to pay for home loans, new cars, starting up new businesses, and so on. (Edwards, 555)
ReplyDelete