DMPQ: What is a monetary policy? What are its types? List down the objectives of monetary policies.

Monetary policy is made by the central bank to manage money supply to achieve specific goals- such as constraining inflation, maintaining an appropriate exchange rate , generating jobs etc.

 

There are basically two types of monetary policies. They are expansionary and contractionary.

 

Expansionary: This means increase in the total supply of money in the economy . while contractionary policy means decrease in the total money supply.

 

Following are the objectives of Monetary policies:

  • To give push to the economy.
  • To achieve price stability
  • Employment generation
  • Exchange rate stabilisation
  • Balancing saving and investment

 

Final Destination for Kerala PSC Notes and Tests, Exclusive coverage of KPSC Prelims and Mains Syllabus, Dedicated Staff and guidence for KPSC Kerala PSC  Notes brings Prelims and Mains programs for Kerala PSC  Prelims and Kerala PSC  Mains Exam preparation. Various Programs initiated by Kerala PSC  Notes are as follows:- For any doubt, Just leave us a Chat or Fill us a querry––

Leave a Comment