What is Mixed Economy | Types | Capitalist and Socialist Economy

 Mixed Economy Mixed economy is an economy which combines the element  of both the capitalist and socialist economies. It attempts to combine the best features of both capitalism and socialism while excluding the Demerits of Both.   Two types of Mixed Economy      1. Government does not directly undertake Production activity. This exists in most of the developed countries such as the USA, UK, etc.     2. Where Government not only Regulates the Private Sector, But also Participates in the Production activities.     Features of Mixed Economy Co - existence of Public and Private Sectors. Features of both Capitalism and Socialism. Government regulates and controls the Private Sectors. Price mechanism Profit Motive. Capitalist Economy   In Capitalist  form of economic system the means of Production and Distribution are Privately own,  and Production is guided Largely through Operation of markets.    ...
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What is Monetary Policy | Instrument of Monetary Policy I

 Monetary Policy

Monetary Policy is a tool that incorporates the actions that the reserve Bank takes to influence the level of GDP.
  • The Reserve Bank can influence the level of output in the Short run, through open Market Operations, changes in Reserve requirements or changes in the Discount rate.

Instrument of Monetary Policy I

Some methods and instruments that are the reserve bank uses are general or Quantative, which control and adjust the total quantity Size, or volume of the deposit created by the commercial bank.

There are three Instruments in this method:

  1. Bank Rate or Discount Rate: The rate at which Reserve bank gives loan to the commercial Bank.
  • If Bank rate change credit rate also change  
          Credit Rate : The Rate at which commercial bank give credit to consumer.

      2. Open Market Operations : The selling and Purchasing of the treasury  bills and government.  
  • Securities by the central bank of any country in order to regulate money Supply in the Economy.  
      3. Reserve Requirement : It is the amount of reserve that the Reserve Bank has Stipulated for Commercial Banks to be kept with Reserve Banks.
  • Credit Rates also change if reserve Requirement change.











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