Monetary policy aims to control money supply, interest rates, and achieve economic growth. The objectives of monetary policy are economic growth, full employment, price stability, neutrality of money, and exchange rate stability. Monetary policy tools include expansionary policy which increases money supply and lowers interest rates, and contractionary policy which decreases money supply and raises interest rates. Instruments of monetary policy include quantitative measures like open market operations and changes in reserve requirements, and qualitative measures like moral suasion and publicity.
1) Statement to Quantity Theory of Money
2) Graph illustration and Pictorial description of QTM
3) Different Approaches to QTM
4) Fisher's Transaction Approach Description
5) Assumptions of Fisher's Transaction Approach
6) Conclusion
This presentation explains various monetary instruments being adopted by the Reserve Bank of India. It also shows their impact on stock market. It also show the statistic trend of inflation, repo rate, reverse repo rate, etc in India.
This document discusses measures to control inflation through monetary and fiscal policy. It explains that inflation occurs due to a mismatch between demand (D) and supply (S), creating disequilibrium. Monetary policy tools used by central banks to reduce money supply and demand include increasing bank rates, open market operations, and cash reserve ratios. Fiscal policy tools include reducing government expenditure, increasing direct taxes, and public borrowing. Both policies aim to correct the disequilibrium between D and S to reduce inflation.
Monetary policy refers to actions taken by central banks to control money supply and credit conditions in order to promote economic growth and stability. The key objectives of monetary policy are full employment, price stability, economic growth, and balance of payments equilibrium. Central banks use both quantitative and qualitative instruments to achieve these objectives. Quantitative instruments include open market operations, bank rate changes, and reserve requirement ratios. Qualitative instruments include credit rationing, margin requirements, and moral suasion. Recent trends in India's monetary policy include keeping the repo rate unchanged at 8% while reducing statutory liquidity ratio requirements.
The objectives of monetary policy are: 1) economic growth through proper utilization of resources and increasing income and living standards, 2) exchange stability by adjusting exchange rates to achieve a favorable balance of payments, and 3) price stability to improve confidence and ensure equal distribution of income and wealth. Other objectives include attaining full employment, controlling credit, reducing income and wealth inequalities, and creating/expanding financial institutions to mobilize savings.
Monetary policy aims to control the money supply and interest rates to promote economic growth and stability. The objectives of monetary policy differ for developed and underdeveloped countries. Underdeveloped countries aim to achieve full employment and economic growth, while developed countries focus on high demand without inflation. Monetary policy tools include open market operations, required reserves, and interest rates. Central banks target variables like money supply and interest rates to indirectly influence macroeconomic goals like inflation and growth. The State Bank of Pakistan has utilized tight and easy monetary stances over the years in response to economic conditions, aiming to balance objectives like inflation, growth, and stability.
Money was not used in early history as exchanges were done through bartering. Definitions of money include anything widely accepted for payments or that acts as a medium of exchange, store of value, and unit of account. Money serves four main functions: medium of exchange, store of value, unit of account, and deferred payment. The money supply is the total amount of money available in an economy and is composed of currency and demand deposits. It is determined by the monetary base and money multiplier. Money supply measurements include M0, M1, M2, M3, and M4. Inflation is a sustained increase in the general price level and can be caused by an increase in the money supply, decrease in goods supply
Monetary policy aims to control money supply, interest rates, and achieve economic growth. The objectives of monetary policy are economic growth, full employment, price stability, neutrality of money, and exchange rate stability. Monetary policy tools include expansionary policy which increases money supply and lowers interest rates, and contractionary policy which decreases money supply and raises interest rates. Instruments of monetary policy include quantitative measures like open market operations and changes in reserve requirements, and qualitative measures like moral suasion and publicity.
1) Statement to Quantity Theory of Money
2) Graph illustration and Pictorial description of QTM
3) Different Approaches to QTM
4) Fisher's Transaction Approach Description
5) Assumptions of Fisher's Transaction Approach
6) Conclusion
This presentation explains various monetary instruments being adopted by the Reserve Bank of India. It also shows their impact on stock market. It also show the statistic trend of inflation, repo rate, reverse repo rate, etc in India.
This document discusses measures to control inflation through monetary and fiscal policy. It explains that inflation occurs due to a mismatch between demand (D) and supply (S), creating disequilibrium. Monetary policy tools used by central banks to reduce money supply and demand include increasing bank rates, open market operations, and cash reserve ratios. Fiscal policy tools include reducing government expenditure, increasing direct taxes, and public borrowing. Both policies aim to correct the disequilibrium between D and S to reduce inflation.
Monetary policy refers to actions taken by central banks to control money supply and credit conditions in order to promote economic growth and stability. The key objectives of monetary policy are full employment, price stability, economic growth, and balance of payments equilibrium. Central banks use both quantitative and qualitative instruments to achieve these objectives. Quantitative instruments include open market operations, bank rate changes, and reserve requirement ratios. Qualitative instruments include credit rationing, margin requirements, and moral suasion. Recent trends in India's monetary policy include keeping the repo rate unchanged at 8% while reducing statutory liquidity ratio requirements.
The objectives of monetary policy are: 1) economic growth through proper utilization of resources and increasing income and living standards, 2) exchange stability by adjusting exchange rates to achieve a favorable balance of payments, and 3) price stability to improve confidence and ensure equal distribution of income and wealth. Other objectives include attaining full employment, controlling credit, reducing income and wealth inequalities, and creating/expanding financial institutions to mobilize savings.
Monetary policy aims to control the money supply and interest rates to promote economic growth and stability. The objectives of monetary policy differ for developed and underdeveloped countries. Underdeveloped countries aim to achieve full employment and economic growth, while developed countries focus on high demand without inflation. Monetary policy tools include open market operations, required reserves, and interest rates. Central banks target variables like money supply and interest rates to indirectly influence macroeconomic goals like inflation and growth. The State Bank of Pakistan has utilized tight and easy monetary stances over the years in response to economic conditions, aiming to balance objectives like inflation, growth, and stability.
Money was not used in early history as exchanges were done through bartering. Definitions of money include anything widely accepted for payments or that acts as a medium of exchange, store of value, and unit of account. Money serves four main functions: medium of exchange, store of value, unit of account, and deferred payment. The money supply is the total amount of money available in an economy and is composed of currency and demand deposits. It is determined by the monetary base and money multiplier. Money supply measurements include M0, M1, M2, M3, and M4. Inflation is a sustained increase in the general price level and can be caused by an increase in the money supply, decrease in goods supply
The document provides an overview of the money supply and the Federal Reserve System in the United States. It defines different measures of money including M1, M2 and discusses how banks create money through fractional reserve banking. It then explains the role of the Federal Reserve in controlling the money supply through tools like required reserve ratios, open market operations, and interest rates.
Fiscal policy deals with a government's taxation and spending decisions. It has several components, including tax policy, expenditure policy, investment strategies, and debt management. The two main instruments of fiscal policy are the revenue budget, which consists of tax and other receipts, and the expenditure budget, which estimates revenues and expenses over time. Fiscal policy aims to influence macroeconomic indicators like employment, inflation, and economic growth through adjustments to tax rates and public spending. It can take an expansionary, contractionary, or neutral position depending on whether spending is higher, lower, or equal to revenues collected.
KEY TAKE AWAY:
What is Monetary policy?
Objectives of Monetary policy?
Types of Monetary policy?
Tools of Monetary policy?
Significance of Monetary policy?
Monetary policy is used by central banks to control the supply of money and regulate credit in order to promote economic growth and stability. There are two types: expansionary policy aims to reduce unemployment by increasing the money supply during recessions, while contractionary policy aims to reduce inflation by decreasing the money supply during expansions. The tools for changing the money supply include open market operations, interest rates, and reserve ratios.
Monetary policy aims to regulate money supply and interest rates to control inflation and stabilize currency. Fiscal policy uses government spending and taxation to influence the economy. Both policies aim for low inflation, employment, exchange rate stability, and growth. Monetary policy maintains money supply balance while fiscal policy stimulates or regulates economic activity. These policies are most effective when coordinated but political pressures can undermine economic objectives. The best policy combination ensures sustained growth and employment without inflation, but external shocks pose challenges, especially for developing economies like Pakistan.
Friedman developed a theory of demand for money that asserts it is a function of total wealth, the division of wealth between human and non-human forms, rates of return on various assets, and other influences on tastes and preferences. His demand for money function includes variables like income, asset prices, and interest rates. Empirical studies found the demand for money is stable and more related to permanent income than current income. For underdeveloped countries, demand may be interest-inelastic and influenced more by expected price changes than interest rates due to financial and economic dualism.
This document defines and explains the key components of money supply and how it is measured. It discusses four main measures of money supply: M0, M1, M2, and M3. M1 includes currency in circulation and demand deposits. M2 adds savings deposits and time deposits. M3 includes longer-term time deposits. Each measure expands the definition in terms of liquidity and availability for use in transactions. The document also explains the components that make up each measure, such as currency, demand deposits, savings deposits, and time deposits.
The document discusses monetary policy and its objectives and tools. The objectives of monetary policy are to ensure economic stability, achieve price stability by controlling inflation and deflation, and promote economic growth. The key tools of monetary policy are quantitative measures like open market operations, cash reserve ratio, and discount rate. Qualitative measures include credit rationing, changing lending margins, moral suasion, and direct controls. Monetary policy uses various tools to contract the money supply and credit to control inflation or expand the money supply and credit to control recession.
Fiscal policy refers to a government's spending and tax policies to influence macroeconomic conditions. The document discusses different aspects of fiscal policy including:
- Countercyclical fiscal policy aims to stabilize the economy by increasing government spending and reducing taxes during recessions, and reducing spending and raising taxes during expansions.
- Discretionary fiscal policy is used purposefully by governments to achieve macroeconomic goals like reducing inflation or boosting growth. Tools include changing spending, taxes, and borrowing.
- Non-discretionary or automatic fiscal policy relies on built-in stabilizers like income taxes that automatically influence demand over the business cycle.
- Large fiscal deficits can adversely impact growth by reducing funds for
This document summarizes monetary policy tools used by the Federal Reserve to influence economic activity. It discusses three main tools: reserve requirements, the discount rate, and open market operations. Changing these tools can implement either an expansionary/easy money policy to increase spending and reduce unemployment, or a restrictive/tight money policy to reduce spending and inflation. The document also discusses how fiscal deficits can impact monetary policy through crowding out and monetizing the debt.
In monetary economics, the quantity theory of money (QTM) states that the general price level of goods and services is directly proportional to the amount of money in circulation, or money supply. The theory was challenged by Keynesian economics,but updated and reinvigorated by the monetarist school of economics. While mainstream economists agree that the quantity theory holds true in the long run, there is still disagreement about its applicability in the short run. Critics of the theory argue that money velocity is not stable and, in the short-run, prices are sticky, so the direct relationship between money supply and price level does not hold.
Alternative theories include the real bills doctrine and the more recent fiscal theory of the price level.
Monetary policy aims to control money supply and interest rates to achieve objectives like price stability and economic growth. In India, the Reserve Bank of India implements monetary policy through tools like open market operations, cash reserve ratio, statutory liquidity ratio, and bank rate policy. The objectives of monetary policy include price stability, controlled expansion of bank credit, and promotion of exports. However, monetary policy faces limitations like time lags, difficulties in forecasting, and the growth of non-banking financial institutions.
Exchange controls are restrictions imposed by governments on obtaining foreign currency and foreign exchange transactions. They are implemented to conserve a country's foreign exchange reserves and control exchange rates. Exchange control regulations cover payments between monetary areas and the disposition of foreign exchange receipts and incomes of residents. The key objectives of exchange controls are to maintain exchange rates, assure imports of essential goods, stimulate production of vital goods, and discourage other goods. Controls are enforced through mechanisms like compensation agreements, import restrictions, and trade control measures. Effects include reduced imports, altered terms of trade, increased domestic employment in favored industries, and incentives for smuggling or misreporting trade values.
The natural rate of unemployment refers to frictional, structural, and surplus unemployment that exists even in a healthy economy. The Federal Reserve estimates this rate is between 4.5-5.0%. Both fiscal and monetary policymakers use this rate and a 2% inflation target when setting interest rates, taxes, and spending. A recession can raise the natural rate by increasing long-term unemployment and making some workers' skills outdated, as occurred from 2009-2012 after the 2008 crisis. The augmented Phillips curve incorporates how people form adaptive expectations, so expansionary policies only temporarily reduce unemployment according to monetarists, as high inflation will eventually offset any stimulus.
Public finance deals with government revenue sources like taxes and expenditures on areas like infrastructure, education, and health. It aims to stabilize the economy, promote growth, and provide essential public goods. Government budgets classify spending into areas and sources of revenue like taxes. A budget deficit occurs when spending exceeds taxes, while a surplus exists when taxes are higher than spending. Deficit financing allows governments to fund spending by borrowing or money creation, but too much can crowd out private investment and cause inflation. Fiscal policy uses taxes and spending to influence employment, growth, and prices.
The document discusses various tools of monetary policy used in India, including cash reserve ratio (CRR), statutory liquidity ratio (SLR), repo rate, reverse repo rate, bank rate, and prime lending rate. CRR is the minimum amount of deposits that banks must maintain as reserves with the central bank. SLR is the minimum amount of deposits that must be maintained as approved securities like cash or gold. Repo and reverse repo rates are the interest rates at which the central bank lends to and borrows from commercial banks. The bank rate is the interest rate at which the central bank lends to commercial banks without collateral.
This document summarizes theories of money demand, including the quantity theory of money and Keynes' liquidity preference theory. The quantity theory views money demand as a function of income only, while Keynes argued it depends on both income and interest rates. Later economists like Tobin and Baumol refined Keynes' model by showing transaction demand also responds to interest rates due to opportunity costs of holding money. Precautionary and speculative demand motives are likewise negatively related to interest rates.
Money takes various forms including coins, banknotes, and records of debt. It functions as a medium of exchange, unit of account, and store of value. Historically, money transitioned from livestock and commodities to precious metals and eventually fiat currency issued by governments. In India, the rupee is the currency, printed by the RBI and minted by the IGM. Money supply refers to the total amount of money available in an economy and is defined and measured differently by central banks using metrics like M0, M1, M2, M3, and M4. The RBI uses tools like reserve ratios, interest rates, monetary policy, and open market operations to control money supply and stabilize prices.
The document discusses several monetary policy tools used by the Federal Reserve:
1) Open market operations, where the Fed buys or sells bonds to influence the money supply and interest rates. This is the most flexible and reversible tool.
2) The discount rate, which is the interest rate banks pay to borrow from the Fed. Lowering this rate makes borrowing cheaper and expands the money supply.
3) Reserve requirements, which set the minimum reserves banks must hold. Lowering these ratios expands the money supply by increasing bank lending capacity.
The document discusses monetary policy tools and functions of the State Bank of Pakistan (SBP). It defines monetary policy as how a country's central bank controls the money supply. The SBP uses various tools for monetary policy including open market operations, required reserve ratios, and the discount rate. The core functions of the SBP are issuing currency, conducting monetary and credit policy, regulating and supervising financial institutions, acting as a bank for commercial banks and the government, managing public debt and foreign exchange, advising the government, and coordinating with international financial institutions.
The document provides an overview of the money supply and the Federal Reserve System in the United States. It defines different measures of money including M1, M2 and discusses how banks create money through fractional reserve banking. It then explains the role of the Federal Reserve in controlling the money supply through tools like required reserve ratios, open market operations, and interest rates.
Fiscal policy deals with a government's taxation and spending decisions. It has several components, including tax policy, expenditure policy, investment strategies, and debt management. The two main instruments of fiscal policy are the revenue budget, which consists of tax and other receipts, and the expenditure budget, which estimates revenues and expenses over time. Fiscal policy aims to influence macroeconomic indicators like employment, inflation, and economic growth through adjustments to tax rates and public spending. It can take an expansionary, contractionary, or neutral position depending on whether spending is higher, lower, or equal to revenues collected.
KEY TAKE AWAY:
What is Monetary policy?
Objectives of Monetary policy?
Types of Monetary policy?
Tools of Monetary policy?
Significance of Monetary policy?
Monetary policy is used by central banks to control the supply of money and regulate credit in order to promote economic growth and stability. There are two types: expansionary policy aims to reduce unemployment by increasing the money supply during recessions, while contractionary policy aims to reduce inflation by decreasing the money supply during expansions. The tools for changing the money supply include open market operations, interest rates, and reserve ratios.
Monetary policy aims to regulate money supply and interest rates to control inflation and stabilize currency. Fiscal policy uses government spending and taxation to influence the economy. Both policies aim for low inflation, employment, exchange rate stability, and growth. Monetary policy maintains money supply balance while fiscal policy stimulates or regulates economic activity. These policies are most effective when coordinated but political pressures can undermine economic objectives. The best policy combination ensures sustained growth and employment without inflation, but external shocks pose challenges, especially for developing economies like Pakistan.
Friedman developed a theory of demand for money that asserts it is a function of total wealth, the division of wealth between human and non-human forms, rates of return on various assets, and other influences on tastes and preferences. His demand for money function includes variables like income, asset prices, and interest rates. Empirical studies found the demand for money is stable and more related to permanent income than current income. For underdeveloped countries, demand may be interest-inelastic and influenced more by expected price changes than interest rates due to financial and economic dualism.
This document defines and explains the key components of money supply and how it is measured. It discusses four main measures of money supply: M0, M1, M2, and M3. M1 includes currency in circulation and demand deposits. M2 adds savings deposits and time deposits. M3 includes longer-term time deposits. Each measure expands the definition in terms of liquidity and availability for use in transactions. The document also explains the components that make up each measure, such as currency, demand deposits, savings deposits, and time deposits.
The document discusses monetary policy and its objectives and tools. The objectives of monetary policy are to ensure economic stability, achieve price stability by controlling inflation and deflation, and promote economic growth. The key tools of monetary policy are quantitative measures like open market operations, cash reserve ratio, and discount rate. Qualitative measures include credit rationing, changing lending margins, moral suasion, and direct controls. Monetary policy uses various tools to contract the money supply and credit to control inflation or expand the money supply and credit to control recession.
Fiscal policy refers to a government's spending and tax policies to influence macroeconomic conditions. The document discusses different aspects of fiscal policy including:
- Countercyclical fiscal policy aims to stabilize the economy by increasing government spending and reducing taxes during recessions, and reducing spending and raising taxes during expansions.
- Discretionary fiscal policy is used purposefully by governments to achieve macroeconomic goals like reducing inflation or boosting growth. Tools include changing spending, taxes, and borrowing.
- Non-discretionary or automatic fiscal policy relies on built-in stabilizers like income taxes that automatically influence demand over the business cycle.
- Large fiscal deficits can adversely impact growth by reducing funds for
This document summarizes monetary policy tools used by the Federal Reserve to influence economic activity. It discusses three main tools: reserve requirements, the discount rate, and open market operations. Changing these tools can implement either an expansionary/easy money policy to increase spending and reduce unemployment, or a restrictive/tight money policy to reduce spending and inflation. The document also discusses how fiscal deficits can impact monetary policy through crowding out and monetizing the debt.
In monetary economics, the quantity theory of money (QTM) states that the general price level of goods and services is directly proportional to the amount of money in circulation, or money supply. The theory was challenged by Keynesian economics,but updated and reinvigorated by the monetarist school of economics. While mainstream economists agree that the quantity theory holds true in the long run, there is still disagreement about its applicability in the short run. Critics of the theory argue that money velocity is not stable and, in the short-run, prices are sticky, so the direct relationship between money supply and price level does not hold.
Alternative theories include the real bills doctrine and the more recent fiscal theory of the price level.
Monetary policy aims to control money supply and interest rates to achieve objectives like price stability and economic growth. In India, the Reserve Bank of India implements monetary policy through tools like open market operations, cash reserve ratio, statutory liquidity ratio, and bank rate policy. The objectives of monetary policy include price stability, controlled expansion of bank credit, and promotion of exports. However, monetary policy faces limitations like time lags, difficulties in forecasting, and the growth of non-banking financial institutions.
Exchange controls are restrictions imposed by governments on obtaining foreign currency and foreign exchange transactions. They are implemented to conserve a country's foreign exchange reserves and control exchange rates. Exchange control regulations cover payments between monetary areas and the disposition of foreign exchange receipts and incomes of residents. The key objectives of exchange controls are to maintain exchange rates, assure imports of essential goods, stimulate production of vital goods, and discourage other goods. Controls are enforced through mechanisms like compensation agreements, import restrictions, and trade control measures. Effects include reduced imports, altered terms of trade, increased domestic employment in favored industries, and incentives for smuggling or misreporting trade values.
The natural rate of unemployment refers to frictional, structural, and surplus unemployment that exists even in a healthy economy. The Federal Reserve estimates this rate is between 4.5-5.0%. Both fiscal and monetary policymakers use this rate and a 2% inflation target when setting interest rates, taxes, and spending. A recession can raise the natural rate by increasing long-term unemployment and making some workers' skills outdated, as occurred from 2009-2012 after the 2008 crisis. The augmented Phillips curve incorporates how people form adaptive expectations, so expansionary policies only temporarily reduce unemployment according to monetarists, as high inflation will eventually offset any stimulus.
Public finance deals with government revenue sources like taxes and expenditures on areas like infrastructure, education, and health. It aims to stabilize the economy, promote growth, and provide essential public goods. Government budgets classify spending into areas and sources of revenue like taxes. A budget deficit occurs when spending exceeds taxes, while a surplus exists when taxes are higher than spending. Deficit financing allows governments to fund spending by borrowing or money creation, but too much can crowd out private investment and cause inflation. Fiscal policy uses taxes and spending to influence employment, growth, and prices.
The document discusses various tools of monetary policy used in India, including cash reserve ratio (CRR), statutory liquidity ratio (SLR), repo rate, reverse repo rate, bank rate, and prime lending rate. CRR is the minimum amount of deposits that banks must maintain as reserves with the central bank. SLR is the minimum amount of deposits that must be maintained as approved securities like cash or gold. Repo and reverse repo rates are the interest rates at which the central bank lends to and borrows from commercial banks. The bank rate is the interest rate at which the central bank lends to commercial banks without collateral.
This document summarizes theories of money demand, including the quantity theory of money and Keynes' liquidity preference theory. The quantity theory views money demand as a function of income only, while Keynes argued it depends on both income and interest rates. Later economists like Tobin and Baumol refined Keynes' model by showing transaction demand also responds to interest rates due to opportunity costs of holding money. Precautionary and speculative demand motives are likewise negatively related to interest rates.
Money takes various forms including coins, banknotes, and records of debt. It functions as a medium of exchange, unit of account, and store of value. Historically, money transitioned from livestock and commodities to precious metals and eventually fiat currency issued by governments. In India, the rupee is the currency, printed by the RBI and minted by the IGM. Money supply refers to the total amount of money available in an economy and is defined and measured differently by central banks using metrics like M0, M1, M2, M3, and M4. The RBI uses tools like reserve ratios, interest rates, monetary policy, and open market operations to control money supply and stabilize prices.
The document discusses several monetary policy tools used by the Federal Reserve:
1) Open market operations, where the Fed buys or sells bonds to influence the money supply and interest rates. This is the most flexible and reversible tool.
2) The discount rate, which is the interest rate banks pay to borrow from the Fed. Lowering this rate makes borrowing cheaper and expands the money supply.
3) Reserve requirements, which set the minimum reserves banks must hold. Lowering these ratios expands the money supply by increasing bank lending capacity.
The document discusses monetary policy tools and functions of the State Bank of Pakistan (SBP). It defines monetary policy as how a country's central bank controls the money supply. The SBP uses various tools for monetary policy including open market operations, required reserve ratios, and the discount rate. The core functions of the SBP are issuing currency, conducting monetary and credit policy, regulating and supervising financial institutions, acting as a bank for commercial banks and the government, managing public debt and foreign exchange, advising the government, and coordinating with international financial institutions.
The money supply is the total stock of money available in an economy at a given time and can be defined in different ways. The monetary base (M0) comprises cash in circulation and central bank reserves. Narrow money (M1) includes M0 as well as checkable deposits and some savings. Broad money (M2) contains M1 plus long-term savings deposits, capturing money fulfilling both medium of exchange and store of value functions.
This document discusses monetary policy and its instruments. It defines monetary policy as the process by which a central bank controls the supply of money in order to promote economic growth and stability. The key instruments of monetary policy discussed are: open market operations, bank rate/discount rate, cash reserve ratio, statutory liquidity ratio. Quantitative measures include open market operations, bank rate, cash reserve ratio while qualitative measures comprise selective credit controls. The effectiveness of these tools depends on the level of monetization and development of the capital market in an economy.
The document summarizes the main monetary policy tools of the Federal Reserve:
1) Open market operations where the Fed buys and sells government securities to increase or decrease the monetary base and influence interest rates. This is the most direct way to impact the money supply.
2) Reserve requirements where adjusting the percentage of deposits banks must keep impacts how much they can lend. Higher requirements reduce lending while lower requirements increase it.
3) Discount window lending where the Fed lends reserves to banks at the discount rate to meet depositors' demands or reserve requirements. The Fed can raise or lower the discount rate to slow or stimulate economic activity.
Chapter 08_Conduct of Monetary Policy: Tools, Goals, Strategy, and TacticsRusman Mukhlis
This document provides an overview of monetary policy tools and goals. It discusses how central banks like the Federal Reserve and European Central Bank implement monetary policy through tools like open market operations, discount rates, and reserve requirements. It also examines the goals of price stability and inflation targeting, and debates whether price stability or dual mandates are preferable. Tactics for choosing policy instruments on a daily basis and evaluating the pros and cons of monetary targeting and inflation targeting are also summarized.
Monetary policy is the process by which a central bank like the RBI controls the supply of money and availability of money by targeting interest rates. It does this in order to achieve objectives oriented toward stable prices and maximum sustainable economic growth. Monetary policy involves either expanding or contracting the money supply by lowering or raising interest rates.
This document provides an overview of monetary policy, including its definition, objectives, tools, and role in economic growth. Monetary policy is defined as the process by which a central bank controls the supply of money in an economy, often targeting interest rates to promote growth and stability. The major objectives of monetary policy are price stability, economic growth, and stable exchange rates. The key tools of monetary policy are open market operations, bank rates, cash reserve ratios, and credit controls. Monetary policy aims to influence aggregate demand and output through expanding or contracting the money supply.
Shots and editing analysis for Gods of Egyptoktawianklosko
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The document provides a summary of Norashikin Abd Rahim's professional experience and qualifications. It details her work history from 2014 to 1991 in various secretarial and administrative roles. It also lists her education qualifications in corporate secretaryship, executive secretaryship, and private secretaryship. Additional information includes her personal details, skills, training attended, and a statement expressing her interest in obtaining an administrative position with opportunities for growth.
The presentation analyzes Intercontinental Exchange (ICE) to provide a recommendation. An intrinsic valuation using a discounted cash flow model implies share prices of $69.09-$81.24, above the current price of $56.65. A relative valuation comparing ICE to competitors implies share prices of $52.04-$63.31. Based on the intrinsic and relative valuations, the presentation recommends buying ICE.
This short document promotes creating presentations using Haiku Deck on SlideShare. It encourages the reader to get started making their own Haiku Deck presentation by providing a button to click to begin the process. In just one sentence, it pitches the idea of using Haiku Deck on SlideShare to create presentations.
Financial Leaders Of Tomorrow - Introduction - Malaysia 2015Orbex Ltd
Orbex investment firm presents Financial Investments Seminar 2015 held in Malaysia Kuala Lumpur and Johor Bahru. The presentation gives a short introduction to the company, investment products and services. For more information, visit www.orbex.com
This document discusses the pricing and sales strategies of secondary products at Steel Authority of India Limited (SAIL) Bokaro plant. It provides background on SAIL and the Bokaro plant. The marketing department sells secondary products like benzene, toluene, and ammonium sulfate through various channels including e-auctions. Pricing factors like auction prices, quantity, and approval from managing director are considered. The document recommends increasing production of secondary products in high demand, lowering prices to compete, and producing more of the most popular products.
Global warming is caused by human pollution that releases greenhouse gases like carbon dioxide and methane into the atmosphere from burning fossil fuels. This traps heat and is increasing the Earth's average temperature, affecting global weather patterns and climates around the world. The problem of global warming can be solved by transitioning away from fossil fuels to renewable energy sources, developing new energy technologies, and reducing meat consumption to decrease greenhouse gas emissions.
The main objectives of monetary policy are economic growth, full employment, price stability, neutrality of money, and exchange rate stability. There are expansionary and contractionary monetary policies. Expansionary policy aims to increase aggregate demand through increasing the money supply and lowering interest rates, while contractionary policy reduces economic activity by raising interest rates. The tools of monetary policy include quantitative measures like open market operations and changing reserve requirements, as well as qualitative measures like moral suasion and direct action.
This document discusses various methods of credit control used by central banks, including bank rate policy, open market operations, and cash reserve ratios. It provides details on how each method works and its effects. Bank rate policy involves the central bank setting a rate at which it lends to commercial banks, influencing other market interest rates. Cash reserve ratios set a minimum amount of reserves commercial banks must hold, affecting their ability to lend. Both seek to influence the money supply and cost of credit to ultimately impact economic activity and prices. The document compares these two methods and notes each has strengths and limitations, recommending central banks combine multiple approaches for effective credit control.
This document provides an overview of monetary policy in India. It defines monetary policy and outlines its key objectives such as maintaining full employment, price stability, and economic growth. It then describes different types of monetary policy approaches including expansionary, contractionary, countercyclical, rule-based and discretionary. The document also discusses quantitative and qualitative monetary policy tools used by the Reserve Bank of India, including bank rates, open market operations, reserve requirements, and credit rationing. It concludes with recent trends, noting the RBI has kept key policy rates unchanged following COVID-19 disruptions.
Monetary policy refers to how central banks use tools like interest rates, money supply, and credit conditions to achieve goals like price stability, economic growth, and unemployment control. The main tools are quantitative and qualitative credit controls. Quantitative controls directly target money supply through interest rates, open market operations, and reserve requirements. Qualitative controls influence credit allocation through margin requirements, credit rationing, and differential interest rates. Monetary policy can be expansionary by increasing money supply to boost economic activity, or contractionary by decreasing money supply to curb inflation.
The document provides an overview of monetary policy, including its objectives, types, instruments, and significance. Some key points:
- Monetary policy refers to measures by central banks to control money supply and credit conditions to influence economic activity.
- Objectives include price stability, full employment, and economic growth.
- Types of monetary policy include expansionary, contractionary, countercyclical, rule-based, and discretionary.
- Instruments include bank rates, open market operations, reserve requirements, repo rates, and moral suasion.
- Monetary policy aims to control inflation/deflation and promote availability of money, credit, and long-term financing for development.
The document discusses central banking and monetary policy. It provides an overview of central banking techniques like open market operations, reserve requirements, and adjusting interest rates to influence money supply and aggregate demand. The document also discusses monetary policy targets like inflation, money supply, and exchange rates. It describes indicators like interest rates and exchange rates that central banks use to gauge the impact of their policies. Quantitative easing and other unconventional policies are mentioned as tools used when interest rates near the effective lower bound.
Monetary policy refers to actions taken by central banks to control money supply and credit conditions in order to promote economic growth and stability. The document outlines the objectives, types, instruments, and significance of monetary policy. The key objectives are full employment, price stability, economic growth, and balance of payments equilibrium. Types of policy include expansionary, contractionary, countercyclical, rule-based, and discretionary. Instruments involve controlling bank rates, open market operations, reserve requirements, and moral suasion of banks. Monetary policy aims to control inflation and deflation while promoting availability of credit and development of financial institutions.
Monetary policy refers to actions taken by central banks to control money supply and credit conditions in order to promote economic growth and stability. The document outlines the objectives, types and instruments of monetary policy. The key objectives are full employment, price stability, economic growth and a stable exchange rate. Instrument include bank rates, open market operations, reserve requirements, and moral suasion. Recent trends in India include keeping the repo rate at 8% while reducing statutory liquidity ratios. Monetary policy aims to balance targets like inflation control and credit availability to support development.
The central bank has two categories of monetary policy tools: general and selective instruments of credit control. General instruments like adjusting the bank rate, engaging in open market operations, and changing reserve requirements apply uniformly to all commercial banks. Selective instruments target specific banks or loans, and include regulating credit margins, moral suasion, and imposing interest rates on consumer loans. In developing countries like India, selective instruments are used more frequently and can effectively influence credit supply even without developed financial markets.
The central bank has two categories of monetary policy tools: general and selective instruments of credit control. General instruments like adjusting the bank rate, engaging in open market operations, and changing reserve requirements apply uniformly to all commercial banks. Selective instruments target specific banks or loans, and include regulating credit margins, moral suasion, and imposing interest rates on consumer loans. In developing countries like India, selective instruments are used more frequently and can effectively influence credit supply even without developed financial markets.
The document provides an overview of monetary policy in India as conducted by the Reserve Bank of India (RBI). It discusses the objectives of monetary policy such as maintaining price stability and economic growth. The key tools and instruments of monetary policy discussed include both quantitative methods (e.g. bank rate policy, open market operations, reserve requirements) and qualitative methods (e.g. margin requirements, credit directives, rationing). The effectiveness and limitations of these different policy tools are also outlined.
Monetary policy refers to actions undertaken by central banks to regulate money supply and credit conditions to promote economic goals like price stability and growth. The key objectives are ensuring economic stability, achieving price stability, and promoting growth. Tools include open market operations, bank rate/discount rate, cash reserve ratio, and moral suasion. Central banks use these to contract money supply and credit during inflation or expand them during recession by buying/selling government securities and adjusting policy rates and reserve requirements. However, monetary policy faces limitations from time lags in implementation and effects, difficulties in forecasting, and underdeveloped financial markets in some countries.
The document discusses the various methods used by the Reserve Bank of India (RBI) to control credit in the economy. It explains that commercial banks have the power to create credit through lending. The RBI uses quantitative methods like bank rate, open market operations, cash reserve ratio, and statutory liquidity ratio to control the total volume of credit. It also uses qualitative methods like rationing of credit, margin requirements, and directives to influence the use and direction of credit flows. The goal of RBI's credit control is to ensure stability in prices and exchange rates as well as maximize output and employment in the country.
The document discusses credit control methods used by the Reserve Bank of India (RBI). It outlines both quantitative and qualitative methods. Quantitative methods like bank rate, open market operations, cash reserve ratio, and statutory liquidity ratio aim to control the total volume of credit. Qualitative methods like rationing credit, margin requirements, and directives aim to influence the use and direction of credit flows. The RBI uses these various tools to promote economic stability and growth.
it is a full information for the students according to thrir examinations point of view about monetary policy and objectives,nature, instruments of monitary policy
This document discusses monetary policy and fiscal policy in India. It defines monetary policy as steps taken by the Reserve Bank of India to regulate money supply, credit availability, and interest rates. The objectives of monetary policy include full employment, price stability, economic growth, and balance of payments stability. Tools of monetary policy discussed include bank rate, cash reserve ratio, open market operations, and selective credit controls. Fiscal policy is defined as the government's tax and spending policies. The objectives of fiscal policy are to influence aggregate demand and achieve economic goals like employment and investment. Types of fiscal policy tools covered are tax policy, government expenditure, and public borrowing.
This document discusses central bank credit control and its objectives and methods. It outlines several quantitative and qualitative methods used by central banks to regulate money supply and credit in the economy. The quantitative methods discussed are bank rate policy, open market operations, and variations in reserve ratios. The qualitative or selective methods discussed are fixation of margin requirements, consumer credit regulation, issuing directives, and rationing of credit. The objectives of credit control are to maintain price stability, economic growth, and meet financial needs during normal and emergency times.
This document discusses the central bank's role in credit control and the various methods used. It defines credit control as regulating the volume of credit to suit the economy's needs. The objectives of credit control include maintaining price stability, exchange rates, money markets, reducing business cycles, and promoting growth. The methods are categorized as general/quantitative and selective/qualitative. Quantitative methods include bank rate policy, open market operations, and reserve ratio variations. Selective methods involve tools like margin requirements, consumer credit regulation, directives, credit rationing, and moral suasion to target specific sectors. Both approaches have limitations in fully controlling credit allocation in the economy.
The document discusses monetary policy and fiscal policy. It defines monetary policy as related to the supply and cost of money in an economy to achieve objectives like economic growth and price stability. The central bank controls money supply using tools like bank rates, open market operations, and reserve ratios. Fiscal policy relates to government revenue and spending through taxation, expenditures, and borrowing. Both policies aim to achieve development through mobilizing resources, maintaining stability, and stimulating employment and growth.
Muhammad Zia-ul-Haq was a Pakistani general who served as President of Pakistan from 1978 until his death in 1988. He overthrew Prime Minister Zulfikar Ali Bhutto in a 1977 military coup and had Bhutto controversially executed. As President, Zia played a major role in the Soviet-Afghan War by aiding the Afghan mujahideen. Domestically, he enacted broad Islamization policies. Zia died in a mysterious plane crash in 1988 along with other senior military officials and American diplomats, and the circumstances of his death have led to conspiracy theories.
The Indo-Pakistani War of 1971 was fought between India and Pakistan over the liberation of Bangladesh. East Pakistan sought independence after winning the 1970 election but being denied power. Mass arrests and violence against East Pakistan led to 10 million refugees fleeing to India. In response, India provided support and training to the Mukti Bahini forces of Bangladesh. By late 1971, full-scale war had broken out across East and West Pakistan as India supported Bangladeshi independence forces. The war ended in two weeks with the surrender of Pakistani forces in the east and the creation of an independent Bangladesh.
Gog and Magog (Yajuj and Majuj) are tribes that will emerge before Judgment Day according to Islamic texts. They will be set loose and swarm from every mound, draining all water in their path. Prophet Jesus and his followers will take refuge from Gog and Magog until God sends worms to kill them all at once. Their stench will cover the land until God sends birds to clear their corpses, fulfilling the prophecy of their destruction prior to the final events preceding Judgment Day.
This document analyzes Porter's five forces for Nestle. It finds that the threat of new entrants is low due to Nestle's strong brand and market leadership. However, the threat of substitute goods is high because Nestle deals in common, daily use products and there is high competition. The bargaining power of suppliers is moderate as Nestle maintains high quality standards, and the bargaining power of customers is also moderate as they have options but Nestle differentiates on quality. Within the industry, competitive rivalry is strong as Nestle's main rivals are Danone and Kraft Foods, but Nestle leads through quality and innovation.
Poverty and crime cause was studied through a questionnaire given to university students. While 52% said poverty does not always cause crime, 40% believed it is a main factor. 42% thought those without an income were most likely to engage in crime. Most respondents (72%) had been victims or witnesses of crime. The conclusion was that poverty and crime are correlated, though other factors also contribute to crime. Most people did not believe the government or justice system was doing enough to reduce poverty or ensure fairness.
1) The China-Pakistan Economic Corridor route passes through Gilgit-Baltistan and Balochistan, disputed territories claimed by India and Baloch nationalists, threatening Indian security and violating human rights.
2) India is developing alternative ports in Iran and Afghanistan, and supporting Balochistan could undermine the CPEC corridor.
3) Local opposition in Khyber Pakhtunkhwa and Balochistan provinces stem from changes to original CPEC plans and concerns that development will not benefit local residents.
Gwadar port is a deep-sea port located in Baluchistan, Pakistan along the Arabian Sea. It was purchased by Pakistan in 1958 and has since undergone development to become a major commercial port. Gwadar port is strategically important as it is located near key shipping lanes and countries with major oil reserves. Its development is planned in two phases and aims to boost Pakistan's economy by improving trade, transportation, infrastructure and job opportunities when complete. The port development also aims to improve conditions in Baluchistan.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
BONKMILLON Unleashes Its Bonkers Potential on Solana.pdfcoingabbar
Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
Let's be real for a second – the world of meme coins can feel like a bit of a circus at times. Every other day, there's a new token promising to take you "to the moon" or offering some groundbreaking utility that'll change the game forever. But how many of them actually deliver on that hype?
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...sameer shah
Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
2. Monetary policy is the macroeconomic policy laid
down by the central bank.
It involves management of money supply and interest rate and is the demand
side economic policy used by the government of a country to achieve
macroeconomic objectives like
Inflation
Consumption
Growth
Liquidity.
3. Tools of monetary policy:
Also known as instruments of monetary policy.
The objectives of monetary policy can be achieved successfully if these instruments are properly
coordinated
4. Bank rate policy:
Bank rate is the discount rate set by the central bank of every country in giving out loans to
commercial banks through bills of exchange.
Bank rate and interest rate are two different things.
There is a positive or direct relation between bank rate and interest rate.
During inflation, the central bank increases the bank rate.
During depression, the central bank decreases the bank rate.
5. Open market operation:
Using this instrument central bank may influence money supply of country directly by the sale
and purchase of securities in the stock exchange.
During inflation it is the duty of the central bank mainly to ensure that the volume of credit
and money supply in the country in cut down.
Whenever, the government want to increase the volume of credit, the central bank then
purchases the securities from commercial banks and people in general upon which payment is
made through cheques.
6. Changes in Reserve Ratio:
Through this policy the central bank determines that a certain proportion of cash deposit from
commercial banks is to be deposited with it ( central bank ) so that the central bank by this way
influences the volume of credit in country
Example in Pakistan a total of 5 % cash is to be kept against demand and time deposits in the
central bank.
If the central bank wants to reduce money supply it increases the reserve ratio requirement.
If the central bank wants to increase money supply it decreases the reserve ratio requirement.
7. Credit Rationing
The first three tools of monetary policy are the quantitative credit control measures and thus
fort instrument will only be practiced if all the previous measures have failed to bring about the
desired result
By credit rationing the central bank fixes the credit ceiling allowed for each and every
commercial bank and will not give further credit to them beyond limit allowed.
8. Moral Suasion
By this qualitative measure the central bank morally persuades or rather requests the
commercial banks not to indulge themselves in such economic activities which may well
aggravate the current economic situation in the country.
Morally word means here that the central bank issues directions to the commercial banks
giving logical reasons.
9. Direct Action:
This method of control will only be applied when the previous method has failed. As, it is now
assumed that commercial banks have now become a threat to the policy, in spite of moral
suasion i-e they continue to give loans as usual and thus the central bank is forced to take direct
action against these commercial banks.
10. Publicity:
From time to time central bank publishes details concerning commercial banks.
The central bank refers to such measure specially when the inflation period is getting worse.
The reason for central bank doing this is to keep the public aware of the commercial banks
activities so that the people actually know to what and where their money has gone.
11. Changes in Margin Requirements:
Marginal requirement is the percentage difference between the value of the collateral against
the loan and the amount of loan given itself to the borrower by commercial banks
Example
The collateral is 100 and the loan given by the bank is 75. thus by this way we can say that
margin requirement is 25%.
12. Consumer Credit Regulations:
The act of selling a consumer good on a credit basis to the people in general is known as
consumer credit rationing.
Such a measure to control credit in the country and regulate money supply is very practical.