Monetary Policy | Economics class 12 #economicsclass12 #class12 #macroeconomics
Monetary Policy | Economics class 12 #economicsclass12 #class12 Monetary Policy – Class 12 Economics Monetary policy refers to the process by which the central bank (such as the Reserve Bank of India) regulates the money supply and interest rates in an economy to maintain price stability, economic growth, and financial stability. It is a crucial tool used to control inflation, manage liquidity, and stabilize the currency. Types of Monetary Policy: Expansionary Monetary Policy: Implemented to boost economic activity by increasing money supply and lowering interest rates. Contractionary Monetary Policy: Used to reduce inflation by decreasing money supply and raising interest rates. Instruments of Monetary Policy: Quantitative Tools: Cash Reserve Ratio (CRR) – The percentage of bank deposits that must be kept as reserves. Statutory Liquidity Ratio (SLR) – The proportion of a bank's net demand and time liabilities to be maintained in liquid assets. Repo Rate & Reverse Repo Rate – The interest rate at which the central bank lends to commercial banks and vice versa. Open Market Operations (OMO) – Buying and selling of government securities to regulate money supply. Qualitative Tools: Credit Rationing: Limiting the amount of loans given by banks. Moral Suasion: Persuading banks to follow monetary policy guidelines. Direct Action: Taking corrective actions against banks violating regulations. Monetary policy plays a vital role in shaping a country’s economy by influencing inflation, investment, and overall financial health. class 12 Economics Economics class 12 class 12 Economic Development Economic Development Eco Development Macro Economics class 12 Macro Economics class 12 Monetery Policy Excess and Deficient demand Excess Demand Class 12 Deficient Demand class 12 Trending Education video Viral Education video Babbar sir Classes Macro Eco class 12 chapter 12 Class 12 Macro economics macro Economics Class 12 Viral video Trending Video #education #economicsclass12 #economicsmadeeasy #class12 #macroeconomics #monetarypolicy #deficientdemand #excessdemand #monetarypolicybybabbarsir #babbarsirvideo Thanks for watching
