Question: How does monetary policy affect the macroeconomy? Explain the fundamentals behind why changes in the money supply have real effects on the economy and the

"How does monetary policy affect the macroeconomy?"

  • Explain the fundamentals behind why changes in the money supply have real effects on the economy and the monetary transmission mechanism. Cite 1 scholarly source please.
  • Explain how monetary policy can be used to effectively stabilize output and smooth business cycles. Cite 1 scholarly source please.
  • Evaluate the role of monetary policy and how it affects the macroeconomy given the implications of the financial accelerator. Cite 1 scholarly source please.

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