EFFECTS OF MONETARY POLICY 3
EFFECTS OF FISCAL POLICY 7
The effectiveness of fiscal and monetary policies has been a subject of controversy among economies ‘’Keynesians and monetarists’’. Monetarists regard monetary policy more effective than fiscal policy while the Keynesians regard the opposite view. Aims of any central economic policy are to increase the economic welfare of the community. It is the work of the central bank to ensure this goal is mate. It’s the central banks work to control the quantity reserves held by the commercial banks. Its responsibility is to see that monetary conditions are consistent with the goals of high employment and stable prices. This assignment discusses the tools used by the central bank to ensure economic stability. These are the monetary policies and the fiscal policies introduced above. It discusses the two policies making reference to their effect on the Zambian economy and our central bank being the bank of Zambia. It discusses the problems of inflation and unemployment that the policies seek to solve and maintain at stable rates. The assignment explains how the policies work and their contribution to the well being of the economy.
IMPACT OF MONETARY POLICIES IN ZAMBIAS ECONOMY.
Monetary policy is the exercise of the central bank control of the money supply and an instrument for stabilizing the economy. According to (David Begg and Damien ward 2007) monetary policy refers to the actions undertaken by a central bank e.g. bank of Zambia to influence the availability and cost of money and credit to help promote national economic goals. What happens to money affects credit and interest rates (the cost of credit) and the performance of an economy.
Types of monetary policy
(Dominick Salvator and Eugene A Diulio 2004)
Qualitative: These are...