Question

Changes in monetary policy occur when the Federal Reserve

Answer 1

Changes in monetary policy occur when the Federal Reserve controls and changes the spending levels to have an impactful change on the economy. The monetary policy is when the monetary authority in a country, in the United States this is the central bank, controls the cost or short-term borrowing or base of money. They target the inflation rates and interest rates to keep price stability and general trust within the countries currency. Since the Federal Reserve controls how the money is spent, they can control our economy with these funds.