monetay and fiscal policy

2. Monetary policy is concerned with the regulation of
the quantity, cost, and allocation of money and credit
in the economy.
It is a mechanism that has serious implications for
economic development, as it helps in determining how
and where the recourses are to be allocated in different
sectors.

3. Monetary policy is referred to as either being expansionary or
contractionary.
 where an expansionary policy increases the total supply of
money in the economy more rapidly than usual, Expansionary
policy is traditionally used to try to combat unemployment in a
recession by lowering interest rates in the hope that easy credit
will entice businesses into expanding.
 Contractionary policy expands the money supply more slowly
than usual or even shrinks it contractionary policy is intended to
slow inflation in order to avoid the resulting distortions and
deterioration of asset values

4. Monetary management in Pakistan
 The drastic reforms in the financial sector of Pakistan
is due to the World Bank and the IMF. Just as the
structural adjustment programmes (SAPs) since 1988
have dramatically transformed the nature of Pakistan’s
economy.