Monetary policy, Managerial Economics

Monetary Policy

Meaning of Economic Growth: The primary function of an whether socialist or capitalist is to satisfy people maximum wants. It must produce consumer goods to make high standard of living for the people a reality. In a free market economy, there is enough sense in saying that consumer is the king because it is he who determines the types and the quantities of goods which the producers would produce in the economy. In a totalitarian economy, the situation is however, different. there the decision regarding what and tow much is to be produced are taken by the few top government officers representing the omnipotent state. The credit mechanism can help in facilitating to achieve this in the economy. Money is the means to achieve an end. Economic growth does not mean higher money income without being accompanied by higher real income. Economic growth means both quantitative and qualitative increase in the quantity of both the goods and services produced in the economy annually.

In short growth means three things. Firstly, it implies an increase in the total physical or real output in the economy. Secondly, the composition and quality of the goods and services produced due to growth should satisfy consumer wants because in the ultimate analysis satisfaction of human wants is the end all economic activities. Thirdly, economic growth should be achieved within the framework of economic freedom. Broadly speaking, economic growth implies sustained increase in the per capital real income. This does not, however mean that economic growth as an objective of monetary policy excludes consideration of important issues like the composition of output between the consumption and the investment goods and the distribution of national income between the different functional classes in the economy.

Posted Date: 12/1/2012 5:28:10 AM | Location : United States

Related Discussions:- Monetary policy, Assignment Help, Ask Question on Monetary policy, Get Answer, Expert's Help, Monetary policy Discussions

Write discussion on Monetary policy
Your posts are moderated
Related Questions
Policies to cure Balance of Payment deficits The measures available to tackle balance of payments deficits include short term measures such as deflation, import controls, dev

Q. Explain the Leibenstein model? Leibenstein (1966) sees a firm's norms or conventions, dependent on its history of management initiatives, labour relations and other  factors

An optimum Population Countries are often described as under populated or overpopulated.  From the economist's viewpoint these terms do not refer to the population density (i.

Q. Explain about Utility analysis? A subset of consumer demand theory which analysis consumer behaviour and market demand employing marginal utility and total utility. Key prin

Q. Implications for the shape of cost function? A cost function is also a mathematical relationship, one which relates the expenses an organisation incurs on the quantity of ou

Real Vs Nominal GNP: "Deflating" by a price Index   One of the problems that confront economists when measuring GNP is that they have to use money as the measuring rod.  Thes

Rail Tours sells packaged tours on rail lines, including gourmet meals and a reserved bed. The most popular tours are in the autumn when colors are at their peak. The overnight pac

What are terms included in oligopoly? Oligopoly includes: • The meaning of oligopoly, and why it arises • Collusion • Game theory, particularly the concept of the pris

Q. What is Marketing Economies? They are allied with selling of the product of the firm. They arise from advertising economies. Because advertising expenses increase less than

a) What do you understand by equilibrium National Income and to what extent is economic growth beneficial to an economy? b) Explain using both diagrams and mathematical tools,