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The Monetary Policy Committee have at their disposal 2 methods of monetary policy 1. Interest Rates, 2. Money Supply 1. Interest rate GENERAL INFO The interest rates determine the profit earned from savings and the cost of a loan. The US rate is 2% at the moment, so your savings in the US probably give you a profit of 1.5% per year If you borrowed money from a bank you would probably pay around 2.5% per year. HOW IT WORKS The interest rate directly affects the disposable income of a consumers (income - tax - bills). An increase in interest rates makes savings more profitable and makes loans more costly. AN INCREASE (DECREASE) IN INTEREST RATES WILL DECREASE (INCREASE) CONSUMER SPENDING 2. Money supply Money supply can be defined in to ways. The amount of your currency in circulation (eg the total money that can be accessed by members of your population. Or the total value of every printed note in circulation (includes foreign countries). Money supply works with interest rates to maintain equilibrium. EG. When you increase interest rates, you reduce the demand for money. In this instance the demand for money is less than the supply of money. In order to restore equilibrium, the government must withdraw money from circulation (buy selling bonds) thus reducing money supply
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The interest rate policy is the component of?
monetary policy.........
What is the difference between Tight monetary policy from easy monetary policy?
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Statement of problem of monetary policy in Nigeria?
the problems of monetary policy in Nigera
Who frames Indian monetary policy?
reserve bank of india frames monetary policy
What is the tight monetary policy?
Tight monetary policy is the money policy with high interest rates and low supply.
The interest rate policy is the component of?
monetary policy.........
What is the difference between Tight monetary policy from easy monetary policy?
pic
Who framed monetary policy?
reserve bank of India frames monetary policy
When was Monetary Policy Committee created?
Monetary Policy Committee was created in 1997.
Statement of problem of monetary policy in Nigeria?
the problems of monetary policy in Nigera
Who frames Indian monetary policy?
reserve bank of india frames monetary policy
What is the tight monetary policy?
Tight monetary policy is the money policy with high interest rates and low supply.
What has the author Jon P Cockerline written?
Jon P. Cockerline has written: 'A comparison of alternative methods of monetary aggregation' -- subject(s): Congresses, Mathematical models, Monetary policy, Money supply
When the governments raise or lowers taxes it is one form of?
monetary policy ITS ACTUALLY FISCAL POLICY . CLOWN -_-
What does loosening monetary policy means?
Loose monetary policy is the money policy that has low interest rates and a high supply.
What is the purpose of the monetary policy?
The purpose of the International monetary policy is tho survey the global economy.
What has the author Michael Carlberg written?
Michael Carlberg has written: 'International economic policy coordination' -- subject(s): Foreign economic relations, Monetary unions, Monetary policy, International economic relations, Fiscal policy 'European monetary union' -- subject(s): Economic and Monetary Union, Macroeconomics, Monetary policy, Monetary unions 'Monetary and Fiscal Policies in the Euro Area' 'An Economic Analysis of Monetary Union' 'Policy Coordination in a Monetary Union' 'International Economic Growth (Contributions to Economics)' 'Public debt, taxation, and government expenditures in a growing economy' -- subject(s): Econometric models, Expenditures, Public, Public investments, Debts, Public, Taxation, Finance, Public, Public Debts, Public Finance, Public Expenditures 'Ein Simulationsmodell zur Stadtplanung' -- subject(s): Cities and towns, Simulation methods, City planning
