Question:

Has monetary policy been tight or easy? why?

by Guest32242  |  earlier

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i know monetary policy has been easy, because the fed has been easing the monetary policy, but i don't know why.

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  1. You mean, has monetary policy been easing or tightening.  The FED has been easing, meaning it is lowering interest rates through adding additional money to the money supply.  This is done through the adjusting either the reserve requirement, fed funds rate or the discount rate.  We currently are adjusting the final two.  

    This process is known as the monetary transmission mechanism.  Check it out, interesting stuff.  Don't bother going into depth on T-Accounts, a brief overview is needed, nothing in depth.

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