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NOTE- Although answer of the asked question starts for the number 2 Monetary Policy, i am giving a little bit more in-detail information with an intension to give a broader persepetive to the asked question...
Governments of any countries use the 2 broad polices- below mentioned- as a control measure of the economy :
1. Through Fiscal policy(Regualte by the government of the country) - Set of programs run by a government in the welfare of the people of the country. Under monetary policy a govnt decides on how much is to be spent on the development activities of the country, decision on different types of tax rates etc. By increasing or decreasing the tax rates, the government controls the level of expenditures of the people.
2. Monetary Policy (Regulated by the central bank of the country ) - Its the control over money supply in the economy. This help to control inflation in a country. 3 broad instruments are :
A) Opent Market Oportunity - Purchase or sale of governemt bonds by the central bank.
B) Reserve Requirement - Using this istrument a governt controls money supply into the economy and hence indirectly controlling the inflation. Under reserve requirements (like, Cash reserve ratio, SLR, C/D etc.) banks of a country are required to keep either the percentage of their deposits as a reserve either with the central bank of the country (RBI in case of India) or invest a definite percentage of their total working capital (like cash) in the government bonds. As a result of these, banks are left with less money available with them to lend. When reserve rates are inceased, the money availble in the economy is less and hence demand decrease.
C) Repo and reverse repo rate - Repo rate is the rate at which government lends money to the commercial banks. Repo rate is simillar to bank rate. The only difference is that repo rate is the rate in imergecy money demand by the banks where as bank rate is the rate implied at normal situations.
Reverse repo rate is the reverse of the repo rate. The intension of this two rates are to restrict the banks from amount of money they inturn can lend to the consumers.
What else can I help you with?
The four main tools of monetary policy are?
The four main tools of monetary policy are: 1) open-market operations 2) changing the reserve ratio 3) changing the discount rate 4) the use of term auction facility
What is the main goal of both fiscal and monetary policy?
The main goal of both fiscal and monetary policy is to stabilize the economy.
The Federal Reserve is divided into how many districts?
The three main tools of the Federal Reserve are: Change the Reserve Requirement Change the Discount Rate Open-Market Operations
Tools of monetary policy use by state bank of Pakistan?
Open market operations basing on money supply in market . The Reserve ratio which remains with state bank deposited by banks as compulsion. Discount rate at which state bank lends money to commercial banks less than the market interest rate. Term auction facility Like mortgage . These are the main tools which then lead to tight and easy monetary policy.
Difference between fiscal and monetary policy?
Monetary policy is one that containes money. this is the release and subsctraction of amount of money in economy by variuos tools (like loans to banks). Fiscal policy is government policy of taxation and subsidising (and goverment consumption). in lamens terms it is the taxing and wellfare of the nation.
The four main tools of monetary policy are?
The four main tools of monetary policy are: 1) open-market operations 2) changing the reserve ratio 3) changing the discount rate 4) the use of term auction facility
What are the 3 main uses of ships?
The three main uses of ships are transportation of goods and people, fishing, and military operations.
What is the main goal of both fiscal and monetary policy?
The main goal of both fiscal and monetary policy is to stabilize the economy.
What two main types of legislation can Congress pass?
Monetary and non-monetary, for instance.
What are the three main materials wood wind instruments are made of?
A long time ago, woodwind instruments were made of... well... wood! Now, they could be made of silver, gold, and bronze.
What are the main instruments in indan music?
No. Your nearly right. The main instruments are from the middle east and the asian continent.
Identify the different types of operations found in the hospitality and catering industry?
the hospitality and catering industry provides three main operations:cateringaccomadationhospitality
Main Refinancing Operations?
What
Who is responsible for carrying out policies about the governments money?
In the U.S., monetary policy is the responsibility of theFederal Reserve System, which uses three main instruments:open-market operations, thediscount rate, and reserve requirements. In the post-World War II era, economists reached a consensus that, in the long run,inflationresults when the money supply grows at too rapid a rate.
What are the main types of business lines?
The three main types of business lines or activities are operations, marketing, and finance. As a company grows other types of business functions become important as well. The three main types of of business organizations are sole proprietor, Partnership, and corporation or company.
What is the origin of the expression of theatre of operations?
during WW2 there were several areas of military operations. European theather of operations and Pacific theater of operations were the two main areas of operations........
What are the three non-pitched percussion instruments?
The snare drum, the cymbals, woodblock, maracas, tambourine
