Monetary
freedom means take away from the government everything that concerns monetary
issues.

The
monetary freedom can be measured based on two factors: the price stability (inflation)
and the price control.

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–      
Inflation:
is monetary phenomenon, an increase in the general price level for buying goods
and service. It can happen within a certain period of time. Its effect is a
loss of money value. Basically, it means ”too much money chasing too few
goods.”

–      
Price
control: is when the government decides to limit prices of goods in the market.

This can happen due to some facts: government wants to avoid consumer’s
exploitation by suppliers, wants to control the rate of inflation, wants to
control the supply. (ensure a shortage).

Monetary
freedom is a combination of these two measures.

Inflation
and price control may lead to significant consequences and distortion of market
activity.

In order to
have monetary freedom, government’s function should be to safeguard property
rights, maintain price stability, fight inflation so that markets can expand.