Monetary Policy Concepts

Front

Expansionary vs. Contractionary Monetary Policy

Back

Expansionary monetary policy aims to increase the money supply to stimulate economic growth, while contractionary policy seeks to reduce the money supply to control inflation.

Front

Short-term vs. Long-term Impacts of Monetary Policy

Back

Monetary policy impacts macroeconomic objectives like growth, inflation, unemployment, and external balance in both the short and long term.

Front

Governments usually present their fiscal policies to the country each year when they deliver the Government budget.

Back

Front

Monetary policy helps the government achieve what type of objectives?

Back

Macroeconomic objectives

Front

One goal of monetary policy is to maintain a low and stable rate of what?

Back

Inflation

Front

Monetary policy promotes a stable economic environment for what?

Back

Long-term growth

Front

Central Bank's role in interest rates

Back

Raises or lowers rates

Front

Effect of high interest rates

Back

Expensive loans, less spending, AD decreases

Front

Quantitative Easing (QE)

Back

Central Bank makes new money, increases money supply

Front

Central Bank buying bonds

Back

Increases cash for banks, enabling more lending