What does tight monetary policy mean and loose monetary policy?

The tightness mentioned here is used to talk about the amount of capital in the market. It is the word for money.

Money refers to money in the financial markets**. Because China used the silver standard before the fiat currency reform in 1935, market transactions generally use **, so it is customary to call capital ** as silver. The monetary system is divided into tight and loose, and the judgment is based on the supply and demand of funds.

If the market is in short supply, it is called "tight money" or "tight money"; There is an oversupply of funds in the market, which is called "monetary looseness" or "monetary loosening".

Tight monetary policy: the amount of money "the actual demand for money.

Loose Monetary Policy: The Actual Demand for Money.

Hello, generally speaking, loose monetary policy is to increase the amount of money in the market, such as issuing money directly, buying bonds in the open market, reducing the reserve requirement ratio and lending rate, etc. When the central bank lowers the reserve requirement ratio and the rediscount refinancing rate, it will purchase treasury bonds, put funds abroad, increase the circulation of money in the market, encourage commercial banks to expand the scale of credit, lower interest rates, promote development and investment, stabilize prices, fully employ, promote economic growth, and balance the balance of payments.

With more money, it's easier for businesses and individuals who need loans to get loans. In general, it can make the economy grow faster. It is a measure to promote prosperity or ward off recession. For example, the issuance of a large amount of credit is a manifestation of loose monetary policy.

Characteristics of accommodative monetary policy:

1. Reducing the reserve requirement ratio so that commercial banks can reduce the reserve requirement ratio and increase the loanable funds.

3.**Banks buy **and currencies in the market.

4.Ease of credit conditions and size.

Benefits of Accommodative Monetary Policy:

1. Under the loose monetary policy, the amount of market currency increases, which reduces the cost of capital use and increases the profits.

2. Increase the amount of money, increase people's monetary income, and promote consumption.

3. Loose monetary policy is a monetary policy used to promote economic development when the domestic economy is not sluggish.

Reasons for the adjustment of loose monetary policy:

1. This time, as China has shifted to the implementation of a proactive fiscal policy and a prudent monetary policy in response to the Asian financial crisis, the combination of "one loosening and one stabilizing" has reappeared. To maintain stable economic growth, there must be corresponding expansionary means to prevent and control inflationary pressures, and loose monetary policy is no longer needed.

2. Liquidity is excess and should be recognized. However, we should also recognize that in the past, so much money and credit was released as a last resort, and played a key role in overcoming the effects of the crisis first. As the situation changes, it's time to adjust monetary policy.

3. The "moderately loose" monetary policy is an "extraordinary move" to deal with the international financial crisis. China's economy has stabilized and rebounded, and moderately loose monetary policy should be withdrawn in a timely manner.

4. Strengthen market security and stability, implement the "rice bag" governor responsibility system and the "vegetable basket" mayor responsibility system, improve the market regulation and control plan, and continue to rectify and standardize the market order.

Contractionary monetary policy is characterized by tightening monetary policy and reducing the amount of money, with the purpose of curbing the increase in demand, and when the economy is overheated, interest rates can be raised to curb the excessive growth of demand.

Tighten the monetary system and reduce the amount of money.

The main measures taken in the application of monetary policy include seven aspects:

1. Reduce currency issuance.

The effect of this measure is that the banknotes will not increase in their original quantity. Banks can hold their hands on funds as a basis for controlling the credit activities of commercial banks. Banks can use the right to issue money to regulate and control the amount of money.

2. Control and regulate the loan to **.

In order to prevent the abuse of loans to fuel inflation, capitalist countries generally limit short-term loans to be paid off when taxes or debts are collected.

3. Implement open market business.

Through its open market operations, banks play a role in regulating the amount of money, expanding or tightening bank credit, and then regulating the economy.

The common measure is to issue ** bonds in the open market, and the more people buy government bonds, the less money will circulate in the market.

4. Increase the reserve requirement ratio.

Increase the reserve requirement ratio. **By adjusting the reserve ratio, banks control the loans of commercial banks and affect the credit activities of commercial banks.

Deposit reserve refers to the deposit in the bank prepared by the financial institution to ensure the withdrawal of deposits and the liquidation of funds, and the proportion of the deposit reserve required by the bank to the total deposit is the deposit-reserve ratio. It is the funds that are required to limit the credit expansion of financial institutions and to guarantee the withdrawal of deposits and the liquidation of funds by customers.

5. Increase the rediscount rate.

The rediscount rate is the discount behavior between commercial banks and ** banks. Adjusting the rediscount rate can control and adjust the scale of credit and affect the amount of money.

6. Selective credit control.

It is a special management of specific objects, including: ** transaction credit management, consumer credit management, real estate credit management.

7. Direct credit control.

It is a measure for the bank to directly intervene and control the credit activities of commercial banks in order to control and guide the credit activities of commercial banks.

Hope for the like.

Contractionary monetary policy, the main measures include? 2017 Tianjin Civil Servant.