Question

whats a hypothetical monetary proposal i can make for the econmy we are dealing with right now?

Answer 1

So to come up with the current situation that we ar edealing with now and if we are able to do something related to the monetary policy we can either comeup with something related to change in money spply change or either we can change something related to interest rate prevailing in the economy and now if we look carefully we have lack of demand in the market because now most of the people are unemployed and they dont have money to spend thus its a demand side market failure and we can use keynsian model formulated for increasing demand in the economy and looking at the model we can say he has taken investment as a function of interest rate thus to motivate more investment and even more spending in the market interest rate should be less then the return that we can get from any investment in the market thus due to it people will prefer to invest rather then keeping it at the bank deposit, and it will be the first thing that is needed to be done elated to monetary policy secondly the important component component of monetary is controlling the supply of money in the market and now by looking at the current situation there is a need to pump money in the economy thus it can be done either by providing the specialized sector specific package or government can urchase private bonds to inflow the supply of money in the market thus ultimately we can say definately monetary policy always have an upper edge as compared to fiscal policy and it is better to induce changes in he monetary policy rather then fiscal policy because monetary policy has long term impact in economy.