monetary Policy is essentially a programme of action undertaken by the Monetary Authorities, generally the Central Bank, to control and regulate the furnish of money with the public and the flow of credit with a conniption to achieving pre-determined macro- economicals goals. At the time of pretentiousness monetary policy seeks to contract fuse spending by tightening the money supply or raising the site of return. objectives To ensure the economic stability at full employment or potential level of output. To promote and encourage economic growth in the economy To achieve price stability by controlling inflation and deflation. SCOPE OF MONETARY POLICY The scope of Monetary policy depends on deuce factors . 1. Level of Monetization of the Economy - - In this all economic transactions are carried out with money as a mediocre of exchange . This is done by changing the supply of and take on for money and the general price level. It is capable of affecting all political economy activities much(prenominal) as Production, Consumption, Savings, Investment etc. . 2. Level of Development of the Capital market Some instrument of Monetary Policy are work through capital market such as Cash Reserve Ratio (CRR) etc.
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