Tools Used to Implement Monetary Policy
[vsw id=”KKHi1HKTpD4″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] Central banks implement the monetary policy using a number of instruments. These affect the aggregate demand through the supply of money, cost of money, and credit availability. The three main tools central banks use…
Economic Growth, Inflation, Interest and Exchange Rates
[vsw id=”KKHi1HKTpD4″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] Economic Growth Each nation’s government takes steps to help the economy achieve the goals of employment, stable prices, and growth. Monetary policy is one of the mechanisms a central bank uses to manipulate the…
Central Banks Targets
[vsw id=”KKHi1HKTpD4″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] A central bank is a national institution granted the prerogative to control the printing and supply of money and credit. Central banks play important roles in the economy since they are the sole suppliers…
Size of a National Debt Relative to GDP
[vsw id=”KKHi1HKTpD4″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] The national debt is the total amount of money owed by the central government. It is important for a country to grow its economy and, at the same time, reduce its national debt. Many…
Describe Qualities of Effective Central Banks
[vsw id=”KKHi1HKTpD4″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] The central bank of any nation worldwide has the main responsibility of managing the monetary policy of the country. They also often have the responsibility of maintaining price stability and inflation. To be more…
Limitations of Monetary Policy
[vsw id=”KKHi1HKTpD4″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] Monetary policy is used in the stabilization of prices and inflation control. However, monetary policy has quite a number of shortcomings and, as such, usually does not reach expectations. These shortcomings are discussed below.
Fiscal Policy
[vsw id=”KKHi1HKTpD4″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] Fiscal policy involves the utilization of government spending and altering tax revenue to influence a number of economic aspects such as the level of aggregate demand, the redistribution of income and wealth, and the…
Monetary and Fiscal Policies
[vsw id=”KKHi1HKTpD4″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] Both monetary policy and fiscal policy can be utilized in an attempt to influence the economy. These measures do not compete against each other. Instead, they complement each other. However, the impact of the…
Expansionary and Contractionary Fiscal Policies
[vsw id=”KKHi1HKTpD4″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] Fiscal policies are carried out by the legislative and sometimes, the executive branch of the government. The two main instruments of fiscal policy are taxes and government expenditure. The government amasses taxes to finance…
Expansionary and Contractionary Monetary Policies
[vsw id=”KKHi1HKTpD4″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] Contractionary and expansionary policies involve modification of the level of money supply in an economy. An expansionary policy increases the supply of money in an economy. On the other hand, a contractionary policy decreases…
