Monetary Policy, Objectives of Monetary Policy

MONETARY POLICY

The policy, by which money system of a state, money supply and liability is controlled, is called monetary policy. In short it is a good economic policy

Monetary policy is an essential part of managerial policy of state.

According to the Economist,

“Monetary policy is the attitudes of the policy authority towards the monetary system of the community under its control. (Paul Finzig)

Objectives of Monetary Policy

1. Stable rate of foreign exchange
2. Stable price label

a. To protect uncertain conditions

b. To protect business cycle

c. To reduce discrimination

d. To increase export

      3. Mild increasing price label

            a. Increase Investment

            b. To increase economic development

      4. Mild decreasing price label

            a. To use scientific development

            b. To Increase income label

       5. Neutrality of money

            a. Important business cycle

            b. Technical strategy and price label

            c. It helps to debtor and creditor

       6. Full employment

       7. Economic development