Respuesta :
Controlling the supply and demand of capital is a component of monetary policy, which is mostly accomplished through the use of interest rates. Monetary policy may also incorporate unconventional techniques like quantitative easing and free market operations.
What is the monetary policy?
In order to ensure price stability and public confidence in the value and stability of the country's currency, the monetary authority of a country adopts a policy known as monetary policy. This policy aims to control either the money supply or the interest rate payable for very short-term borrowing, which refers to borrowing by banks from one another to meet their short-term needs.
By altering interest rates or eliminating surplus reserves, monetary policy can increase the amount of money in circulation or decrease it. Fiscal policy, in contrast, focuses on taxation, government spending, and borrowing as tools for a government to control economic cycle phenomena like recessions.
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