A Governments Monetary Policy Is Its Plan To Control. What might policymakers do in the face of these economic indicators? A government may increase its borrowing and its spending in order to spur economic growth.
Before a bank borrows from the Federal Reserve to fill out its required reserves, the bank is expected to first. + + Monetary policy is another tool that governments use to control the economy.
This policy comes into play when the government wants to control the inflation level.
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Country Q has experienced a rapid increase in its unemployment rate and a sharp decline in its GDP. I shall then try to outline what it can do and how it can best make its. If the Fed increases bank reserve requirements, the banking sector's excess reserves are reduced, leading to a reduction.