what are the 2 types of monetary policy 
monetary policy includes the policies set by a nation s central bank the policies are generally categorized as expansionary monetary policy or contractionary monetary policy the former is needed to spur and grow the economy when it is slow or in a recession this involves low interest rates a contractionary monetary policy is one where the economy needs to slow down or curb high inflation this involves high interest rates the bottom linethe term dove when applied to monetary economic policy refers to an individual that pursues an expansionary monetary policy which includes low interest rates in order to make the cost of borrowing money cheaper thereby spurring consumer demand a hawk on the other hand pursues a policy of contraction keeping interest rates high though categorizing policymakers as doves and hawks is easy for comparisons in reality economic situations require a fluid movement of interest rates to help the economy when there is high inflation or when the economy is overheated interest rates need to be high when the economy is sluggish or in a recession interest rates need to be kept low 