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How do central banks control inflation and stabilize the economy?

We cover different monetary policy tools that central banks use to achieve this, such as setting interest rates and manipulating the money supply. The video also explains how inflation targeting is a monetary policy strategy that central banks use to set an explicit target for inflation and achieve that target by using monetary policy tools. The video also highlights how central banks must balance the goal of controlling inflation with the goal of promoting economic growth and stability.

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