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    Expansionary Monetary Policy: Monetary Policy of India: Objectives, Implementing Measure and Performance!

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    Rajdeep Sarkar
    The document discusses India's monetary policy objectives of controlling the money supply, availability of money, and interest rates to achieve economic growth and stability. It explains that monetary policy can be expansionary, by increasing the money supply, or contractionary, by decreasing the money supply. Expansionary monetary policy stimulates the economy by boosting the money supply, lowering interest rates, and increasing demand, which can help ward off recessions but is often implemented after a recession has already begun.

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    Expansionary Monetary Policy: Monetary Policy of India: Objectives, Implementing Measure and Performance!

    Uploaded by

    Rajdeep Sarkar
    24 views1 page
    The document discusses India's monetary policy objectives of controlling the money supply, availability of money, and interest rates to achieve economic growth and stability. It explains that monetary policy can be expansionary, by increasing the money supply, or contractionary, by decreasing the money supply. Expansionary monetary policy stimulates the economy by boosting the money supply, lowering interest rates, and increasing demand, which can help ward off recessions but is often implemented after a recession has already begun.

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    This is a short note on Monetary Policy of India

    Original Title

    Monetary Policy

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    The document discusses India's monetary policy objectives of controlling the money supply, availability of money, and interest rates to achieve economic growth and stability. It explains that monetary policy can be expansionary, by increasing the money supply, or contractionary, by decreasing the money supply. Expansionary monetary policy stimulates the economy by boosting the money supply, lowering interest rates, and increasing demand, which can help ward off recessions but is often implemented after a recession has already begun.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    24 views1 page

    Expansionary Monetary Policy: Monetary Policy of India: Objectives, Implementing Measure and Performance!

    Uploaded by

    Rajdeep Sarkar
    The document discusses India's monetary policy objectives of controlling the money supply, availability of money, and interest rates to achieve economic growth and stability. It explains that monetary policy can be expansionary, by increasing the money supply, or contractionary, by decreasing the money supply. Expansionary monetary policy stimulates the economy by boosting the money supply, lowering interest rates, and increasing demand, which can help ward off recessions but is often implemented after a recession has already begun.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Monetary Policy of India: Objectives, Implementing Measure and Performance!

    Monetary policy is the process of a government central bank or monetary authority of a


    country uses to control (i) the supply of money, (ii) availability of money, and (iii) cost of
    money or rate of interest to attain a set of objectives oriented towards the growth and
    stability of the economy. Monetary theory provides insight into how to craft optimal monetary
    policy.
    Monetary policy is referred to as either being an expansionary policy, or a contractionary
    policy, where an expansionary policy increases the total supply of money in the economy
    and a contractionary policy decreases the total money supply.

    Expansionary Monetary Policy


    Definition: Expansionary monetary policy is when a central bank uses its tools to stimulate the economy.
    That increases the money supply, lowers interest rates, and increases aggregate demand. That
    boosts growth as measured by Gross Domestic Product (GDP). It usually diminishes the value of the
    currency, thereby decreasing the exchange rate. It is the opposite of contractionary monetary policy.
    Expansionary monetary policy is used to ward off the contractionary phase of the business cycle.
    However, it is difficult for policymakers to catch this in time. Therefore, you will most often see
    expansionary policy used after a recession has already started.

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