ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Introduction. The Fed, as the nation’s monetary policy authority, influences the availability and cost of money and credit to promote a healthy economy. Congress has given the Fed two coequal goals for monetary policy: first, maximum employment; and, second, stable prices, meaning low, stable inflation.

Detailed explanation-2: -Thus, the main objective of monetary policy is to control cost and availability of money.

Detailed explanation-3: -It is the Federal Reserve’s actions, as a central bank, to achieve three goals specified by Congress: maximum employment, stable prices, and moderate long-term interest rates in the United States (figure 3.1).