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ECO102
CHAPTER 10
MONETARY
POLICY
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Money demand
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Money supply
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Money market
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Monetary policy

Expansionary monetary Contractionary monetary


policy: policy:
The central bank increases the The central bank decreases the
money supply money supply
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Main objective of monetary policy
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Situation 1: Recessionary gap with
government intervention
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Situation 2: Inflationary gap with government
intervention
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Solved question 1
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Solved question 2
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Solved question 2
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Solved question 2
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Solved question 2
Question 3 15

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