What are the two types of monetary policy? > 자유게시판

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Monetary policy plays a crucial role in managing a country's economy, and it can be categorized into two types: expansionary and contractionary. Expansionary monetary policy aims to stimulate economic growth by lowering interest rates and increasing the money supply. This encourages borrowing and spending. In contrast, contractionary monetary policy seeks to control inflation by raising interest rates and reducing the money supply. Both are vital tools used by central banks to stabilize the economy. Additionally, understanding the types of fiscal policy is key in complementing monetary measures for economic stability.