How are monetary policy, the bond market and inflation related? Apply these relationships to advise...

Question

How are monetary policy, the bond market and inflation related? Apply these  relationships to advise a small-business owner who wants to start a pension fund  for her/his employees. (Students are to provide their own details about the type  of small business and employees of that business.)

David · Accepted Answer

Monetary policy is policy control inflation. Monetary policy has various tolls to control inflation. 
Monetary policy is the policy aimed at controlling the money supply to achieve price stability in 
the market. Monetary policy works through controlling the money supply. There are two types of 
monetary policy: expansionary monetary policy and contractionary monetary policy.

How are monetary policy, the bond market and inflation related? Apply these relationships to advise a small-business owner who wants to start a pension fund for her/his employees. (Students are to...

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