What is the role of monetary policy in a mixed economy?

Economics Mixed Economy Questions



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What is the role of monetary policy in a mixed economy?

The role of monetary policy in a mixed economy is to control and regulate the money supply, interest rates, and credit availability in order to achieve economic stability and promote growth. It is typically implemented by the central bank of a country and aims to influence inflation, employment levels, and overall economic activity. Monetary policy can be used to stimulate or slow down the economy by adjusting interest rates, open market operations, and reserve requirements. In a mixed economy, monetary policy works alongside fiscal policy to maintain a balance between government intervention and market forces.