European Union Public Policy

Monetary policy is a macro frugal policy that he been closely monitored by the EUBy implementing this policy , the EU decreases the supply of resolve funds , putting upward pressure on the interchange rate , while buying these securities creates excess liquidity or surplus funds , putting downward pressure on the cash rate .

Thus , banks and other financial institutions in the attempt to maintain profit margins , will set their evaluate above the cash rate , known as the touch on rate (Simon , 2005The main objectives of monetary policy include a sustained train of non-inflationary economic growth , leading to the economic prosperity and improved welfare of people , reducing level of unemployment , and also minimizing inflation and maintaining the stability of the value of the EUROA loosening of monetary policy would reduce the severity of an economic recession by boosting the level of economic practise , as consumer and investment expense would ontogeny , resulting in an increased level of economic activity and a reduction in unemployment . However , a change of monetary policy would tend to reduce inflation , notwithstanding slow down rate of economic growth and increase unemployment . Due to this tension /conflict between policy objectives , the govt . cannot however rely upon one policy to achieve its economic goals , kinda , a mix involving both fiscal policy and microeconomic reform policies . Also , due to the fast changing genius of economic conditions resulting from globalization , it is not possible for govt . to achieve entirely these aims in the short term , instead , to identify its priorities , and depict direction for...If you want to get a full essay, enact it on our website: Ordercustompaper.com

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