Monetary Policy of money

Monetary Policy of money:

The fundamental goals of macroeconomic policy in most of the countries are complete employment, price stability, quick economic growth, balance of payments equilibrium and economic integrity. Economic justice means equitable distribution of income. The government attempts to attain the goals via macroeconomic policy. Macroeconomic policy can be widely divided into monetary and fiscal policy. Obviously, the government follows other policies like industrial policy, agricultural policy, tariff policy and so forth. However we limit our discussion only to monetary and fiscal policy.

“Monetary policy is policy which utilizes the central bank’s control over the supply and cost of money as an appliance for attaining the objectives of economic policy” (By Edward Shapiro).

Instruments of Monetary Policy:

Roughly we might say that monetary policy is the credit control policy. The tools of credit control can be widely categorized into:

(1) Quantitative credit control measures; and

(2) Selective credit control measures.

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