What is monetary policy?
Monetary policy is the regulation of interest rates and the availability of money in order to provide sustainable growth and prevent hard crashes in the market. In the United States, monetary policy is set by an agency known as the U.S. Federal Reserve. Other countries may use a similar system or some other sort of centralized agency, up to and including the federal government itself. The value of monetary policy is somewhat debatable, but is used in many free market economies as a way for the government to provide some oversight in the market. When an institution is in charge of monetary policy, it is usually done in one of two ways. One way is to buy securities back from banks. This will increase the bank’s reserves, stimulating them to lend to other institutions. The other way the do that is to set interest rates at a certain level, which can also affect the economy. In the United States, the Federal Reserve executes monetary policy through a board and a chairman. The chairman is ap
