What is Monetary Policy?

Monetary policy refers to the economic policies a government makes to ensure the sustainable economic growth and macroeconomic prosperity of a nation. Monetary policy is typically carried out by a nation's central bank to control the money supply, interest rates, the ebb and flow of money through a country's economy, and other parameters that shape a country's economy. Monetary policy can also be tied to larger geographical regions like the European Union, which makes use of the European Central Bank (ECB) and other constituents to ensure the long-term economic prosperity of the European Union.