Sunday, November 22, 2015

Term of the Day: Monetary Policy

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November 22, 2015
Monetary Policy

Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as modifying the interest rate, buying or selling government bonds, and changing the amount of money banks are required to keep in the vault (bank reserves).

The Federal Reserve is in charge of the United States' monetary policy.

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