Monetary Policy within the IS-LM Framework

The majority of economists would admit thatmoney is powerful and that changes in moneywill impact the economy. Monetary theory analyzesand determines how changes in the supplyof money affect the economy.This book details the collection of policiesthat use monetary tools known as monetarypolicy. For example, the main monetary authorityof a country is its central bank. In the UnitedStates it is called the Federal Reserve Bank System(Fed), which is a federation of 12 FederalReserve Banks. The Fed is responsible for initiatingprinting of money, monitoring the interestrate, and controlling the supp