What is the monetary policy carried out by?

Answer 1

Monetary policy refers to the actions taken by a nation's central bank to manage the money supply and interest rates, aiming to achieve macroeconomic goals such as controlling inflation, maintaining employment levels, and fostering economic growth. It can be categorized into expansionary policy, which involves lowering interest rates and increasing money supply to stimulate the economy, and contractionary policy, which raises interest rates and reduces money supply to curb inflation. Central banks use various tools, including open market operations, reserve requirements, and discount rates, to implement these policies effectively.