Running Head: MACRO-ECONOMIC ISSUEMacro-Economic Issue:The Effectiveness of the Monetary Policy in Controlling InflationStudents NameProfessorCourseDate1EFFECTIVENESS OF MONETARY POLICY IN CONTROLLING INFLATIONTittle Page1Table of Contents2Introduction3Impact of Inflation on The economy3Role of the Monetary Policy in Controlling Inflation4Open market Operations4The Use of Reserves5Interest Rates5Conclusion6References72EFFECTIVENESS OF MONETARY POLICY IN CONTROLLING INFLATION3IntroductionThe stability of the macroeconomic conditions is a fundamental aspect of sustainableeconomic growth and development. Inflation is one of the things that lead to instability of theeconomy. It refers to the rapid and sustained increase in the general prices of services and goods(Cheung, Chow & Ng, 2016). Most of the effects of inflation have an adverse impact on theeconomy like the high cost of goods and services, reducing savings and industrial strikes. Themonetary policy is one of the corrective mechanisms that have been adopted to control inflation.An analysis of the role of the monetary policy helps to helps to evaluate its effectiveness incontrolling inflation.Impact of Inflation on The economyInflation has both positive and negative impacts on the economy. The first advantage ofinflation is wage adjustments. It becomes easier to increase the salaries of productive workers.Inflation can also boost growth. It provoke ...
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