Monetary Policy of Bd 2012

In: Business and Management

Submitted By showebabcabc
Words 1217
Pages 5
Monetary Policy of
Course No: 302 Submitted To:
Mohammad Shahadat Hossain
Assistant Professor
Department of Finance & Banking
University of Chittagong Submitted By:
Name: Md.Showeb.
ID NO: 09303074
Name: A.K.M Ataul Islam
ID NO: 09303111
B.B.A. (3Rd Year)-Final Term
Session: 2008-2009
Department of Finance & Banking
University of Chittagong

Monetary policy
Monetary policy is the process by which the monetary authority (Central Bank) of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. Monetary theory provides insight into how to craft optimal monetary policy. It is referred to as either being expansionary or contractionary, where an expansionary policy increases the total supply of money in the economy more rapidly than usual, and contractionary policy expands the money supply more slowly than usual or even shrinks it. Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses into expanding. Contractionary policy is intended to slow inflation in order to avoid the resulting distortions and deterioration of asset values.

Bangladesh bank has declared the…...

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