Monetary policy is a set of measures the central bank takes, such as the Federal Reserve in the USA or RBI in India.
Monetary policy is designed to help an economy grow by creating more jobs, reducing unemployment, and increasing growth. However, monetary policy can also impact a country’s level of inflation by increasing or decreasing the money supply or interest rate.
Monetary policy can transition an economy from a recessionary period to a period of economic growth. Monetary policy affects an economy in several ways. The main objective is to help increase employment, reduce unemployment, and increase economic growth.