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13.10: Introduction to Monetary Policy and Economic Outcomes

  • Page ID
    47497
  • What you’ll learn to do: explain how monetary policy affects GDP and the interest rates

    The image has a silhouette of a bear and bull facing off against each other. The image has a background of stock exchange numbers.

    Expansionary and contractionary monetary policies affect the broader economy, by influencing interest rates, aggregate demand, real GDP and the price level. In this section, we will take a look at the mechanisms by which monetary policy plays out. We will also review some of the Federal Reserve’s policies over the last four decades and the impact its decisions had on the economy.

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