What Are The Major Goals Of The Monetary Policy In The United States?
Succinctly speaking, there are four major goals of the monetary policy of the United States. First and foremost, the goal of stability in the general price level is of huge importance. This involves incorporating strategies to counter inflation and even incessant deflation. If there is no stability in the price level, then it leads to retarded economic growth, provokes volatility in interest rates, stimulates consumption and deters savings. The second goal of the monetary policy is to reduce unemployment. Complete elimination of unemployment is an impossible phenomenon as frictional unemployment (unemployment in between changing jobs) is constantly taking place. The third goal of the monetary policy is economic growth that is, an increase in the economy’s output of goods and services. Both the second and third goals are closely related. The fourth and final goal speaks about stability in foreign currency rates. Sometimes fluctuations are favorable but in a general scenario, constant ch
