Macro: Unit 4.4 -- The Effects of Monetary Policy

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In this step, you'll learn about the effects of monetary policy and how it works. It will discuss how the Federal Reserve uses monetary policy to help stabilize the economy, by attempting to manipulate the money supply with appropriate monetary policy. This can make it more or less advantageous for firms to take out loans and help drive the economy back to full employment. Additionally, it will look at the concept of investment demand, which is the desired quantity of investment spending by firms across the economy. Lastly, it will discuss the four policy options the Federal Reserve has to either increase or decrease the money supply."