Monetary theorists rely on the control of the money flow in an economy. These economists using these theories are more determined to increase employment and stabilize the prices of commodities. Monetary policy is defined as a process that governments use to control the flow of cash in their countries, regions or even the world (Hubik 12). They direct they actions at rates if interests (price at which money can be borrowed), with an aim of promoting the economic growth of the country or region.
Policies by monetary theorist may come up with either a contractionary or an expansionary policies. A contractionary policy is directed at reducing inflation hoping to evade deterioration of asset values by expanding money supply more slowly than usual. Expansionary theory on the other hand increases the total money supply than normal status (Hubik 13). macroeconomic stabilities can be achieved using several ways.
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