Monetary policy is the use of interest rate and money supply manipulation by a central government in order to influence economic activity. This can be done by controlling the amount of money in circulation or by changing lending rates such as the prime rate. Ultimately, the goal of monetary policy is to encourage economic growth, employment and stability in inflation rates. It is used as a tool by governments to manage their economies, promote consumer spending and support economic stability. Monetary policy has a significant impact on price stability, employment levels, economic growth and other macroeconomic goals.