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Monetary Policy

Monetary Policy

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Published by shikhar_verma

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Published by: shikhar_verma on Nov 09, 2010
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01/02/2013

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 MONETARY POLICY
 
WHAT IS MONETARY POLICY?
 The process by which the central bank ormonetary authority of a country controls (i) the supply of money,(ii) availability of money, and(iii) cost of money or rate of interest,
 
GROWTH&STABILITYOFECONOMY
 
 TYPES OF MONETARY POLICY
Expansionary policy:
 –
Increases the total supply of money in theeconomy
 –
Involves decreasing the interest rates topump liquidity in the market.
 –
Government is using since October.
Contractionary policy:
 –
Decreases the total money supply.
 –
Involves raising interest rates in order tocombat inflation.
 –
Government used early this year.

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