What is the primary function of monetary policy?
Understand the Problem
The question is asking about the main role or purpose of monetary policy, which involves various tools and measures used by a country's central bank to manage the economy, specifically in relation to inflation and interest rates.
Answer
Manage economic fluctuations and achieve price stability.
The primary function of monetary policy is to manage economic fluctuations and achieve price stability.
Answer for screen readers
The primary function of monetary policy is to manage economic fluctuations and achieve price stability.
More Information
Monetary policy is crucial because it influences a country's economic performance by controlling interest rates and money supply, aiming for steady growth with minimal inflation.
Sources
- Monetary Policy and Central Banking - imf.org
- Understanding the Role of Monetary Policy in the Economy - stlouisfed.org
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