Monetary Policy and Economic Activity:An Overview

Monetary policy may either be defined in a broad or in a narrow sense. Defined in a broader sense, monetary policy not only includes monetary measures but also non-monetary measures which have monetary effects. In this sense, monetary policy covers a wide range of policies and measures. It includes not only monetary measures which influence the cost and availability of money but also those non-monetary measures which influence monetary situations. Thus, non-monetary measures such as control of prices or wages, physical control, budgetary measures, income policy measures, etc. would be included with in the scope of monetary policy defined in broader sense in so far as their primary aim is to influence the monetary situation.