interest rates
a.k.a, open market operations
A contractionary monetary policy or a contractionary fiscal policy.
they allow the Fed to change the nation's money supply to its most ideal level
they allow the Fed to change the nation's money supply to its most ideal level
The Federal Reserve can change the money supply with 1) open market operations, 2)making changes in the reserve ratio, and 3) making changes in the discount rate. Of the three policies the open market is the most common.
The fiscal policy focuses on how government intervention will shift the demand depending on which issue is the most pressing. The supply policy is used when more employment is needed.
inflation
Open market operations is the most used instrument for controlling changes in the money supply.
There are two general types of economic policies. The first is fiscal policy, which operates on the principle that the most effective way for a government to influence the economy is through its spending. For example, in a recession, governments will try to stimulate the economy by spending more money by building infrastructure and creating training programs, for example. The second is monetary policy, which operates on the principle that the most effective way for a government to influence the economy is through its control of the money supply. For example, in a recession, governments will lower interest rates to encourage borrowing and increase the money supply in an attempt to stimulate the economy.
In most countries, monetary policy is made by the Central Bank, which prints money.
bankers
monetarism
Monetarism ;)