Monetary Policy Paper
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Monetary Policy Paper 1
Monetary Policy Paper
Chris Limon
MBA 501
Donna Danns
September 26, 2006
Monetary Policy Paper 2
Introduction
Fiscal and monetary policies focus on quickly returning the economy to sustainable, healthy growth. Any type of fiscal relief package will boost consumer and business spending and can augment the nations long-term growth potential. Expansionary monetary policy can stimulate growth and provide insurance against the possibility of deflation. This paper will present information on four topics: (1) tools used by the Federal Reserve to control the money supply, (2) how these tools influence the money supply and in turn affect macroeconomic factors? (3) how money is created? (4) recommended monetary policy combinations that best achieve a balance between economic growth, low inflation, and a reasonable rate of unemployment.
Monetary policy is usually administered by a Government