Monetary Policy Operations of the Central Bank

In order to iron out cyclical fluctuations in the economy, the central bank will often take monetary policy measures. Monetary policy refers to the various policy instruments that the central bank will use to increase or decrease the money supply to adjust interest rates, thereby guiding investment and consumption. Why does the central bank formulate and implement monetary policies? In order to achieve their objectives, what measures will the central bank take? After these measures have been implemented, what sort of effect will they have? The contents of this chapter will analyze these topics.