🔍Monetary policy is essential to maintain stability in the economy and reduce the impact of fluctuations.
📈The stability of an economy depends on aggregate demand, which is influenced by factors like consumption, investment, and government spending.
💸Fluctuations in aggregate demand can have undesirable effects on the economy, such as inflation and high unemployment.
🏦The Federal Reserve is responsible for the nation's monetary policy in the United States.
💰The Fed uses monetary policy tools like interest rates and open market operations to stimulate or decrease aggregate demand.