Monetary policies as instruments to promote economic growth

Faced with an instability in economic growth caused by a recession or accelerated inflation, the Fed uses the open market operation to increase or decrease the available reserves of commercial banks which, in turn, will affect the amount of money available in the economy . In addition to the open market operation, the Fed has other tools available to promote growth, sustainability, and economic stability in a country. These tools have been used historically; A suitable example was the 2008 mortgage debt crisis.

1. Explain monetary policy, its role, and its effects on short- and long-term economic fluctuations. Use the aggregate demand and supply model.
2. Explain each of the tools that exist in expansionary monetary policy and contractionary monetary policy.