Monetary Policy

Business / Taxes / Monetary Policy: A country’s central bank is responsible for its monetary policy. In the United States, for example, the Federal Reserve aims to keep the economy growing but not allow it to become overheated. In a sluggish economy, the Fed may lower the short-term interest rate to loosen credit and allow more cash to circulate in an attempt to stimulate expansion. Or, if it fears the economy is growing too quickly, it may tighten credit by raising the short-term interest rate to reduce the money supply, in an attempt to rein in potential inflation. In pursuit of its monetary policy, the Fed can also increase or decrease the money supply by buying or selling government securities. To avoid a potential recession, for example, the Fed might increase its purchases of US Treasury notes and bonds from banks and brokerage firms, providing them with more money to lend.

Other Words for Monetary

Monetary Noun Synonyms: pecuniary, cash, money, fiscal, financial, capital, numismatic, nummular, nummary

Other Words for Policy

Policy Verb Synonyms: approach, procedure, (game) plan, design, scheme, programme, method, system, management, conduct, behavior, strategy, tactic(s), principle(s), protocol, regulation, rule, custom, way, practice, ways and means, action

European Monetary Union (EMU)

Business / Agriculture / European Monetary Union (EMU): As agreed in the Maastricht Treaty, 11 European Union members began participating in the EMU on January 1, 1999. The 11 countries are Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxemb MORE

Accommodative Monetary Policy

Business / Finance / Accommodative Monetary Policy: Federal Reserve System policy to increase the amount of money available to banks for lending. See: Monetary policy. MORE

Monetary Indicators

Business / Finance / Monetary Indicators: Economic indicators of the effects of monetary policy, such as the condition of the credit market. MORE