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Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency. Further goals of a monetary policy are usually to contribute to economic growth and stability, to low unemployment, and to predictable exchange rates with other currencies.

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Monetary policy affects the value of a country's currency (e.g. interest rate & money supply changes affect the value of cash). Foreign investment is made by purchasing that country's currency (via c …
answered Dec 26 '14 by Baker