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Monetary policy helps the governing body to ensure that the total amount of money available in the community is kept consistent with the total volume of goods and services produced in that community. If this is not done then the buying power of money goes either down or up, which results in inflation or deflation.
Federal Funds Interest Rate and Exchange Rate are the most commonly used economic indicators to analyze the importance of monetary policy decisions. Over the recent past, the Federal Reserve has been raising interest rates continuously to control the money in the economy that is improving after the 2001 recession...
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