Scribd Logo
Upload

Welcome to Scribd!

  • 14 views

    Policies To Deal With Inflation: Monetary Policy

    Uploaded by

    Aditya Ghosh

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Policies To Deal With Inflation: Monetary Policy

    Uploaded by

    Aditya Ghosh
    14 views9 pages

    Original Title

    POLICIES

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    14 views9 pages

    Policies To Deal With Inflation: Monetary Policy

    Uploaded by

    Aditya Ghosh

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 9

    POLICIES TO DEAL WITH INFLATION

    1) Monetary policy

    2) Fiscal policy

    3) Incomes policy

    4) Policies to increase supply

    5) Price control
    Monetary policy
    • It is adopted by the central bank of the country
    (central bank of Maldives is MMA) when the bank
    feels money supply in the country is very high.
    • The three instruments used in this policy are:

    • - CRR (Cash Reserve Ratio) –

    • Interest rate/bank rate and –


    • Securities
    • Cash reserve ratio is a percentage of the

    deposit kept by the banks as a reserve. The

    central bank will instruct all the commercial

    banks whether to increase the CRR or not


    CRR

    • ↑CRR → ↓supply of loan

    →↓money

    supply→↓AD→↓price level
    • Cash reserve ratio is a percentage of the

    deposit kept by the banks as a reserve. The

    central bank will instruct all the commercial

    banks whether to increase the CRR or not.


    Interest rate/bank rate

    • ↑bank rate →↓ demand for

    loans→↓money

    supply→↓AD→↓price level
    Securities

    • Selling securities→↓money

    supply→↓AD→↓price level
    THANK YOU

    You might also like