The two kinds of monetary policy are expansionary and contractionary. The monetary policy implemented with the objective of reducing the circulation of money throughout the economy is known as a contractionary kind of monetary policy. You can read about the Monetary Policy – Objectives, Role, Instruments in the given link.
Expansionary monetary policy is used when there is recession or economic slowdown.
Further readings:
- Monetary Policy Committee (MPC) – Structure, Objectives UPSC Notes
- Monetary System – Types of Monetary System
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Statutory Liquidity Ratio (SLR) – Definition, Objective & Impact |
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