Friday, January 27, 2017

Monetary policy definition

Monetary policy known as monetary policy as the process by which you can the monetary authority in any country that controls the supply of money, often targeting the rate of inflation or interest rates to ensure price stability and public confidence in the currency, which aims to contribute to economic growth, and reduce the size of unemployment, and maintain exchange rates that can predict with other currencies. It can be referred to monetary policy as expansionary or contractionary process; as the expansion increases the overall policy listings of money in the economy larger than normal speeds, while deflationary policies are expanding the money supply more slowly than usual; that it is shrinking, and the expansion is used to combat unemployment in a recession by lowering interest rates in the hope that the ease of access to loans will entice companies to expand, while deflationary aims to slow inflation to avoid distortions, and the deterioration of asset values, and must Alacharah that monetary policy differs from fiscal policy, which refers to the tax and spending government, borrowing associated with it. Date of monetary policy is linked to monetary policy, with interest rates, availability of credit, including instruments of monetary policy interest rates in the short term, and reserves of the bank through the monetary base, and for centuries for many there was only a monetary policy forms such as resolutions on the currency, and the decisions to print paper money credit to create, and which are believed to be now part of the monetary authority, even though they did not coordinate in general with other forms of monetary policy during this time. Monetary policy has executive decisions were in the hands of power fees seigniorage, and when you see the big commercial networks came the ability to set the price of gold and silver, the price of the local currency against foreign currencies, and was known paper as the money jiaozi, which originated from the PN in the seventh century in the country China, did not replace the coins, and was used in conjunction with copper coins. The Yuan Dynasty successive first government to use paper currency, and then they began to print paper money without restrictions, leading to inflation emergence, and in 1694 was the establishment of the Bank of England, and since that moment the idea of ??an independent monetary policy began from the executive procedures, intended to preserve the value of the currency, printed and observations that will deliberate on an equal footing against the coins, and during the period between 1870 to 1920 AD, a group of industrial countries to work on central banking systems, currently uses five types of this policy, namely: inflation targeting, targeting the level of prices, The monetary aggregates, and a fixed rate, and the gold standard.

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