Question

1. What monetary policy actions have been taken to deal with COVID?

2. What were the objectives?

3. How would you know if those actions were effective?

Answer 1

Monetary policy actions taken to deal with Covid-19 are -

• Firstly they are planning to provide the monetary support to the economy where the due to supply shock the production has been blocked caused due health production and illness
• Secondly they wanted to provide monetary support to the agricultural sector who have enormously effected due to Covid-19 , so commercial banks are planning to lend them loans in order to get back in the situation of stability

The main Objectives are-

• The first objective is to try to implement the idea of new normal strategy which we have learned from unconventional policies made earlier specially in the period of great recession
• Second objective is to bring everything back to the position of stability so providing funds and lending loans will serve the purpose upto some extend.

How would you know if those actions are effective-

• When providing loans to those who are highly effective from gets back to their position not stability shows certainly show their effect on the GDP of the country that will show the effectiveness of the monetary policies
• Secondly when companies starting to profits and to those companies who are getting in to position of insolvency saves themselves with the help of monetary policies this will show the effectiveness of monetary policies