- Economic Stability: Control booms and depressions.
- Full Employment: Create jobs and reduce involuntary unemployment.
- Economic Growth: Increase output and raise living standards.
- Price Stability: Control inflation and maintain value of money.
- Reduce Inequality: Ensure fair distribution of income and wealth.
- External Equilibrium: Maintain balance of payments stability.
Definitions [1]
Definition: Monetary Policy
“The management of the expansion and contraction of the volume of money in circulation for the explicit purpose of attaining a specific objective such as full employment.” — R.P. Kent
“Monetary Policy consists of the steps taken or efforts made to reduce to a minimum the disadvantages that flow from the existence and operation of the monetary resources in the economy to attain certain specific objectives….” — Prof. Crowther
“Monetary policy involves the influence on the level and composition of aggregate demand by the manipulation of interest rates and the availability of credit.” — D.C. Aston
“By monetary policy, we mean any conscious action undertaken by the monetary authorities to change the quantity, availability and cost of money.” — G.K. Show
Key Points
Key Points: Objectives of Fiscal Policy
