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
How does economic theory contribute to managerial decisions?

Keynes and  Mitchell Description According to Keynes description, a trade cycle is characterised by alternating expansionary and contractionary wavy movements in the aggregate

a) A change in demand means that: b) On the production-possibilities drawing, unemployment is represented by:

The Current Account This records all transactions involving the exchange of currently produced goods and services and is subdivided into i.          Visibles: A record

The aim of monopolist is to maximise profit therefore; he would produce that level of output and charge that price which gives him maximum profits. He would be in equilibrium at th

BALANCE OF PAYMENTS The Balance of Payments of a country is a record of all financial transactions between residents of that country and residents of foreign countries.  (Resi

The use of arc elasticity in economic analysis involves a good deal of chariness since it is capable of being misinterpreted. Arc elasticity coefficients vary between the same two

State the types of demand elasticity Income Elasticity: Elasticity of demand with respect to change in consumer's income. Price Expectation Elasticity of Demand: Elast


a)      In 1948, the money GNP was $520 billion and the price index was 120.  In order to   make the 1948 GNP comparable with the base year, the 1948 GNP must be adjusted    to: