1
Central banks control money supply and interest rates for economic stability.
2
Inflation control is vital; central banks aim for stable inflation.
3
Balancing objectives like employment and inflation is central to effective central banking.
Central banks are vital institutions that steer the monetary policy of nations and promote economic stability. Their primary duties involve controlling the money supply, setting benchmark interest rates, and maintaining healthy inflation levels.
Tools and Strategies for Central Bank Monetary Policy
One of the main devices central banks employ to implement monetary policy is regulating the supply of money in circulation. The money supply represents the total currency stock and other liquid assets available in an economy at any given time. Central banks monitor the money supply meticulously and use various tools to expand or contract it as needed to even out the business cycle.
Open market operati
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