Monetary PolicyMonetary PolicyThe economy is the backbone of society. There are many factors that operate and govern the economic structure of our society. Factors such as scarcity and choice, opportunity cost, marginal analysis, microeconomics, macroeconomics, factors of production, production possibilities, law of increasing opportunity cost, economic systems, circular flow model, money, economic costs, and profits all contribute to what is known as the economy. These properties, as well as some others, work together to influence the economy. Microeconomics and macroeconomics are two main components. Both are divided into different components that dictate social norms and points of view. “Microeconomics and macroeconomics can be described in terms of small scale versus large scale or in terms of partial versus general equilibrium. Perhaps the most important distinction, however, concerns the role of balance. While microeconomic issues rarely challenge the notion of a natural equilibrium, the existence of business cycles and, above all, unemployment suggests to too many observers that macroeconomics raises issues of a different nature.” (McConnell & Brue, 2004). In the study of macroeconomics there are several sub-factors that influence the economy favorably or negatively. One dynamic of macroeconomics is monetary policy. Monetary policy consists of deliberate changes in the money supply to influence interest rates and therefore the level of spending in the economy. “The objective of monetary policy is to achieve and maintain price level stability, full employment and economic growth.” (McConnell & Brue, 2004).Monetary PolicyWhat is monetary policy?“Monetary...... half of document......l Reserve, 2008). The economy is an ever-evolving organism that acts and reacts based on the stimulus of various factors and consumers. References Federal Reserve. (2008). FRB: Report on monetary policy to Congress. Retrieved July 4, 2008, from www.federalreserve.govFederal Reserve Bank of San Francisco. (2007). US monetary policy. Retrieved July 3, 2008, from http://www.frbsf.org McConnell, Campbell R., & Brue, Stanley L. (2004). Economics: principles, problems and policies 16e. [University of Phoenix Custom Edition Electronic Text.,: McGraw-HillCompanies. Retrieved July 4, 2008, from the University of Phoenix MMPBL-501 website. University of Phoenix. (2008). Economics for managerial decision making [Computer software]. Retrieved July 3, 2008, from the University of Phoenix Simulation website, MMPBL-501