The following are the goals of
monetary policy:
Full Employment: According to Keynes (1936), full employment means
absence of involuntary unemployment. In other words, full employment is a
situation in which everybody who want to work gets work. Onwukwe (2003), note that it is the
desire of every good national government to provide ample job opportunities for
the citizenry. However it must be noted that full employment does not mean that
100 percent of the labour force will be employed. At any point in time there
must be some level of unemployment co-existing with unfilled vacancies in any
particular economy. This happens because frictional unemployment is unavoidable
in any economy no matter how developed.
Price Stability: Onwukwe(2003), went further to say that this goal or
objective has to do with keeping inflation in check, that is controlling the
rate at which prices of goods and services increase over time. The goal of
ensuring price stability is desirable because of the evils associated with
inflation.
Economic
Growth: Economic growth can be defined as a quantitative increase in a
country’s output of goods and services. Achieving economic growth is desirable
to every growing economy.
Balance of Payment Equilibrium: Generally countries try much as possible try to
avoid deficit in their balance of payment. By definition, balance of payment is
a tabulation of the credit and debit transaction of the country with foreign
countries and international institutions. The transactions are divided into
current account and capital account.
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