Answer to Question #235447 in Economics for amanuel

Question

 What is Monetary Policy? Discuss the effects of each instruments of the monetary policy on money supply, interest rate, income and employment. 

Answer 1

Monetary policy is the control of the quantity of money available in an economy and the channels by which new money is supplied. By managing the money supply, a central bank aims to influence macroeconomic factors including inflation, the rate of consumption, economic growth, and overall liquidity.