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  Tuesday November 21, 2017

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WHAT IS MONETARY POLICY?
Learn even more about this topic with the Encyclopedia of Personal Finance™

Monetary policy determines the proper supply of money for the economy. If there is an excess of money in circulation, borrowing becomes easier and inflation often occurs. If there is a shortage of money in circulation, borrowing becomes more expensive and production is often slowed.

Monetary policy seeks to find just the right balance of money in circulation. The proper supply of money depends upon the goals of a society. In some countries, the goal is to keep prices stabilized—in other words, to keep inflation low. In addition to maintaining stable prices, the United States also seeks to promote growth in the economy through its monetary policy. This combination of goals requires a careful balancing act.

Now that you know what monetary policy is, let's find out who makes these important decisions about our money.




LEARN EVEN MORE WITH THE ENCYCLOPEDIA OF PERSONAL FINANCE. CLICK HERE!

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