Monetary policy
That part of the government's economic policy whichtries to control the size of the total stock of money (and other highly liquid financial assets that are close substitutes for money) available in the national economy in order to achieve policyobjectives that are often partly contradictory: controlling the rate of increase in the general price level ( inflation ), speeding up or slowingthe overall rate of economic growth (mainly by affecting the interest rates that constitute such a large share of suppliers' costs for new investment butpartly by influencing consumer demand through the availabilityof consumer credit andmortgage money), managing the level of unemployment (stimulating or retarding total demandfor goods and services by manipulating the amount of money in the hands of consumersand investors), or influencing the exchange rates at which the national currency trades for other foreign currencies (mainly by pushing domestic interest rates above or below foreign interest rates in order to attract or discourage foreign savings from entering or leaving domestic financial markets).
