What's it: An expansionary monetary policy, or a loose monetary policy, is a monetary policy aiming to increase the economy's money supply. The increased money supply should stimulate economic growth through aggregate demand. The injection of money
Monetary Policy
Contractionary Monetary Policy: Taming Inflation With Higher Rates – Tools, Impacts
What's it? A contractionary monetary policy, tight monetary policy, or restrictive monetary policy is a monetary policy aimed at reducing the money supply's growth rate in the economy. Its aim is to reduce the pressure caused by high inflation and to
Liquidity Trap Explained: Stuck at a Zero Rate – Causes, Impacts, Solutions
What's it? A liquidity trap is a situation in which an expansionary monetary policy cannot further lower interest rates. As a result, these policies are unable to generate economic growth or push up the inflation rate. In simpler terms, the central
Monetarist View: How Money Supply Impacts Growth and Inflation
Monetarists refer to economists who hold a strong belief that changes in the money supply are the main determinants of economic performance and business cycle behavior. In their argument, the economic health of a country depends on monetary supply or
Monetary Policy – Tools for a Controlling Inflation and Growth [Purposes, Types]
Monetary policy plays a critical role in shaping a nation's economic health. It's a set of actions taken by the central bank to influence the money supply and credit availability within the economy. By adjusting these levers, the central bank aims to
Money: Functions, Types, Demand & Supply
What's it: Money is everything we use or accept widely as a means of payment for goods and services, including coins and banknotes. It also functions as a unit of account and a store of value. It replaces barter payments in the modern