This essays talks about how the monetary policy is used by Federal Reserve in America.

The monetary policy is an important policy because it controls the country economy. In America the monetary policy is control by the Federal Reserve. Using the tools of the monetary policy, the Federal Reserve can affect the volume of money and credit and their price interest rates in America. So therefore the Federal Reserve influences employment, output and the general level of prices. It is important that the Federal Reserve use the monetary policy in …

…likely to rise. In this case, the only way to bring inflation down is to tighten so much and for so long that there are significant losses in employment and output. So therefore from by research I found out it is a must that Federal Reserve use the monetary policy in America to stabilize the economy. Failure to do this could lead the economy to economic crisis, unstable levels of unemployment and low business activities.