How would a monetary policy solve the problem of balance of payment deficit and economic stagnation
- Use of open market operations. It involves the purchase of securities from the public in order to increase money supply.
- By reducing bank rates to promote borrowing and investment.
- Reduction of special deposits. This enable commercial banks to have more money to lend
- Devaluation of the local currency to promote exports and increase foreign exchange earnings.
- Use of non-selective credit control to enable indiscriminate lending.
- Reduction of liquid reserve ratio/cash ratio to increase ability of commercial banks to lend more.
- Adoption of pump-printing
CATEGORIES Economics
TAGS Dr. Bbosa Science
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