The Impact of Monetary Policy on Inflation [Contractionary and Expansionary]

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  • Math

  • High School

  • 12th grade

  • Calculus and Advanced Math Concepts

  • English

Author's Instructions

Monetary policy, with its direct impact on liquidity, reduces or increases inflation. The way monetary policy affects economic inflation depends on the type (tools) and direction (contractionary or expansionary) of the policy.

Moreover, implementing monetary policy may lead to a boom or recession in various economic sectors by changing societal consumption patterns.

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