When the government implements a monetary policy, it has influence over economic activity, particularly through the manipulation of money and credit supplies as well as the alteration of interest rates. The most common purposes for carriying out this policy are:
To sustain or make full employment possible.
To support or keep high levels of economic growth.
To make prices and salaries achieve stability.
Before the twentieth century, monetary policy was broadly considered almost useless to excercise influence over the economy. This changed after WWII, when governments started implementing measures to decrease inflation by regulating money supply.
