Everything else held constant, an autonomous monetary policy easing increases aggregate demand.
A country's central bank uses a set of instruments called monetary policy to regulate the total amount of money in circulation, foster economic expansion, and implement measures like adjusting interest rates and altering bank reserve requirements.
The Federal Reserve Bank of the United States carries out a monetary policy through a dual mandate to maximise employment while containing inflation.
Central bankers utilise monetary policy to maintain economic stability and control inflation and unemployment. A declining economy is stimulated by an expansionary monetary policy, and an inflationary economy is slowed by a contractionary monetary policy. The monetary and fiscal policies of a country are frequently in sync.
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