[This is part of the series: The Complete Guide To Economics 101.]
What is monetary policy?
Monetary Policy is policy set in place by a central bank in regard to the money supply.
Monetary policy centers around decisions on the appropriate growth of the money supply and corresponding price levels.
Tools of monetary policy are buying and selling government bonds, setting the bank’s reserve requirements, and setting short-term interest rates.
Monetary policy is included as part of Macroeconomics.
The other way the government tries to alter the economy is through fiscal policy.