Expansionary Monetary Policy Vs Contractionary Monetary Policy A monetary policy can either be contractionary or expansionary. The former accelerates economic growth while the latter restricts it. Conventionally, an expansionary policy is used to address issues of joblessness during depression by lowering the rate of interest with the hope easy credit will attract companies to expand.
Effects of an Expansionary Monetary Policy The role of an expansionary monetary policy is that of increasing economic growth and commonly lessening unemployment and the increase in prices. The policy can be implemented in varying ways some of which are as highlighted below. The central bank can implement this policy by buying government bonds in
Contractionary Monetary Policy Contractionary monetary policy is defined as macroeconomic tool that is used by the central bank of a country or its finance ministry for purposes of slowing down the economy. This kind of policy is enacted by a government with the aim of reducing the supply of money and ultimately, spending within a
Objectives of the World Trade Organization The World Trade Organization was formed after GATT members signed an agreement in 1994. Unlike GATT, the World Trade Organization was formed after signing an international treaty that was approved by all participating countries. Thus, organization has an international status just like the World Bank and the IMF. However,
Objectives of the World Bank The World Bank also called the International Bank for Reconstruction and Development is a global financial institution that offers financial assistance to member countries while supplementing and promoting private foreign investment as well as promoting a long-range balance in the growth of the international trade. It was established in 1945
Floating Exchange Rate Floating exchange rate is also known as fluctuating exchange rate and it refers to a kind of exchange rate system through which the currency value is given time to fluctuate in accordance to the market foreign exchange. A currency using floating currency is commonly referred to floating currency and it is contrasted