Managerial Economics - Inflation
Methods Of Controlling Inflation
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It is clear that the inflationary situation in the long run is not going to help the economy to grow.
Methods Of Controlling
Inflation
It is clear that the inflationary situation in the long run is not going to help the economy to grow. Therefore the Government has to take many steps to overcome this problem. The given list of measures was taken through monetary and fiscal policy of our country and is explained in detail in the following chapters.
1.Monetary measures : to control inflation are:
Bank rate
Open market operations
Higher reserve ratio
Consumer credit control
Higher margin requirements
2.Fiscal measures:
Regulating to Government expenditure
Taxation
Public borrowing
Debt management
Over valuation of home currency
3.Others:
Wage policy
Price control measures and rationing the essential supplies
Control Of Inflation:
It is clear that the inflationary situation in the long run is not going to help the economy to grow. Therefore the Government has to take many steps to overcome this problem. The given list of measures was taken through monetary and fiscal policy of our country and is explained in detail in the following chapters.
1.Monetary measures : to control inflation are:
Bank rate
Open market operations
Higher reserve ratio
Consumer credit control
Higher margin requirements
2.Fiscal measures:
Regulating to Government expenditure
Taxation
Public borrowing
Debt management
Over valuation of home currency
3.Others:
Wage policy
Price control measures and rationing the essential supplies
Moral
suasion
The two important tools of macro level economic policy are monetary policy and fiscal policy. The monetary policy regulates the supply of money and availability of credit in the economy. It deals with both the lending and borrowing rates of interest for commercial banks. These two tools are used to control inflation and mitigate its severity.
Monetary measures: Since too much money is the fundamental problem in the economy, the central banking authorities use various instruments to reduce the money supply and credit.
Anti Inflationary Measures:
The two important tools of macro level economic policy are monetary policy and fiscal policy. The monetary policy regulates the supply of money and availability of credit in the economy. It deals with both the lending and borrowing rates of interest for commercial banks. These two tools are used to control inflation and mitigate its severity.
Monetary measures: Since too much money is the fundamental problem in the economy, the central banking authorities use various instruments to reduce the money supply and credit.
Fiscal
measures: By adopting suitable measures in
taxation, public expenditure and
borrowing, the government can curb inflation. The following chapter discusses
these two measures in detail.
Tags : Managerial Economics - Inflation
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