Answer :
Final answer:
Monetary policy involves controlling the money supply to meet macroeconomic goals like economic growth, low unemployment, and low inflation, and is administered by the Federal Reserve.
Explanation:
Controlling the money supply to achieve desired macroeconomic goals is known as monetary policy. This critical function is carried out by the central bank of the United States, which is the Federal Reserve. Formulated under the Federal Reserve Act of 1913, the Fed wields three main tools for manipulating monetary policy to influence the economy.
These tools aim to adjust the availability and cost of money and credit, thereby promoting the overarching objectives of economic growth, low unemployment, and low inflation. It is essential for monetary policy to maintain the health of the banking system to avoid the macroeconomic dangers that can arise from a malfunctioning banking sector.
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Answer:
The answer is monetary policy
Explanation:
Monetary policy is an economic policy that manages the size and growth rate of the money supply in an economy. It is a powerful tool to regulate macroeconomic variables such as inflation, consumption, growth and liquidity.
