Question

Discuss with example monetary policy and how it establishes federal reserve structure of country?    ​

Answer 1

Explanation:

Monetary policy is the macroeconomic policy laid down by the central bank. It involves management of money supply and interest rate and is the demand side economic policy used by the government of a country to achieve macroeconomic objectives like inflation, consumption, growth and liquidity.

Congress developed the Federal Reserve Act to establish economic stability in the United States by introducing a central bank to oversee monetary policy. The law sets out the purpose, structure, and function of the Federal Reserve System. Congress can amend the Federal Reserve Act and has done so several times.