Question

1) You will begin by writing down the definition of "monetary policy."

Answer 1

It should be noted that monetary policy simply means the policy that's adopted by the monetary authority in a country in order to control interest rates and the money supply.

Monetary policy.

Your information is unclear but the clear and complete ones will be answered appropriately. The main monetary policies include the reserve requirement, open market operations, discount rate, and the interest on reserves.

It should be noted that a larger money supply leads to the reduction of the market interest rates. This makes it less expensive for consumers to borrow.

Also, a smaller money supply raises the market interest rates. Expansionary monetary policy leads to an increase in the money supply. This will lead to an increase in expenditure and therefore, the aggregate demand will shift to the right.

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