Respuesta :
A tight monetary policy can be used to decrease aggregate demand because it stimulates exports and reduces imports.
The monetary authority of a nation implements monetary policy by regulating the money supply or the interest rate on extremely short-term borrowing. To guarantee price stability and foster currency trust, the monetary policy frequently sets inflation or interest rate targets.
Simply expressed, maintaining price stability while keeping in mind the goal of growth is the core goal of monetary policy because price stability is a crucial prerequisite for sustainable economic expansion.
Since a tight monetary policy encourages exports and discourages imports, it can be employed to lower aggregate demand. Management of inflation or unemployment and preservation of exchange rates are the major goals of monetary policies.
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