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monetary policy

n. (context economics English) The process by which the government, central bank, or monetary authority manages the supply of money, or trading in foreign exchange markets.

Monetary policy

Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.

Further goals of a monetary policy are usually to contribute to economic growth and stability, to lower unemployment, and to maintain predictable exchange rates with other currencies.

Monetary economics provides insight into how to craft optimal monetary policy.

Monetary policy is referred to as either being expansionary or contractionary, where an expansionary policy increases the total supply of money in the economy more rapidly than usual, and contractionary policy expands the money supply more slowly than usual or even shrinks it. Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses into expanding. Contractionary policy is intended to slow inflation in order to avoid the resulting distortions and deterioration of asset values.

Monetary policy differs from fiscal policy, which refers to taxation, government spending, and associated borrowing.

Usage examples of "monetary policy".

The Fed Chairman is keeping a nice, even strain on monetary policy.

His professional reputation was that of an expert on monetary policy.

World monetary policy was evidently too important to leave to national politicians.

Nor, for that matter, did it hurt to have New Kiev and her coeterie of Liberal advisers-like the Housemans-to hide behind if any awkward questions were asked about fiscal and monetary policy, ether.

If she had been a better secretary, she might have tried to learn something about banking, finance and monetary policy, so she could perhaps share in the excitement others seemed to find in them.

The national government would have responsibility for foreign affairs, trade, immigration, citizenship, and monetary policy.