KEBIJAKAN MONETER - Kebijakan Moneter dan Kebijakan Fiskal Part 1

Summary

In this video, the presenter explains the concepts of monetary and fiscal policies, focusing on monetary policy. Key topics include the definition of monetary policy, its objectives, types (expansive and contractive), and the instruments used to control the money supply, such as discount policies, open market operations, cash ratio policies, and selective credit policies. The video also covers how to calculate the money supply using the cash ratio method. The lesson aims to help students understand the role of monetary policy in stabilizing the economy, managing inflation and deflation, and ensuring economic growth.

Takeaways

• 😀 Monetary policy refers to the actions taken by a central bank to control the money supply in an economy to achieve economic stability.
• 😀 The main goal of monetary policy is to maintain economic stability by balancing the amount of money in circulation with the availability of goods and services.
• 😀 Monetary policy helps to control inflation, stabilize prices, and support job creation through strategic money management.
• 😀 There are two main types of monetary policy: Expansive monetary policy (easy money) and Contractionary monetary policy (tight money).
• 😀 Expansive monetary policy increases the money supply to combat deflation or recession by lowering interest rates and making borrowing easier.
• 😀 Contractionary monetary policy decreases the money supply to combat inflation by raising interest rates and tightening access to credit.
• 😀 Key instruments used in monetary policy include: discount rate (adjusting interest rates), open market operations (buying and selling government securities), cash ratio (setting reserve requirements for banks), and selective credit policies (controlling lending conditions).
• 😀 The central bank uses the discount policy to adjust interest rates. Raising interest rates reduces money supply, while lowering them increases it.
• 😀 Open market operations involve buying or selling government securities to adjust the money supply in the economy, directly affecting how much money circulates.
• 😀 To calculate the money supply, the formula used is: Money Supply = Liquid Assets / Minimum Reserve Requirement, which helps determine how much money is circulating in the economy.

Q & A

What is monetary policy?

Monetary policy refers to the actions taken by a country's central bank to control the supply of money in the economy to achieve economic stability. In Indonesia, this is done by the central bank to regulate the amount of money circulating in the economy to maintain economic stability.

What are the main goals of monetary policy?

The main goals of monetary policy are to maintain economic stability by balancing the money supply with available goods and services, control inflation, reduce unemployment, and improve trade and payment balances.

What is the difference between an expansive and a restrictive monetary policy?

An expansive (or easy money) policy involves increasing the money supply, typically used in times of deflation or economic recession. A restrictive (or tight money) policy reduces the money supply, often to combat inflation.

How does the central bank control the money supply?

The central bank controls the money supply through various tools such as the discount rate (changing interest rates), open market operations (buying and selling government securities), cash reserve requirements, and selective credit policies.

What is the role of the discount rate in monetary policy?

The discount rate refers to the interest rate charged by the central bank on loans to commercial banks. Adjusting the discount rate influences borrowing costs and can either encourage or discourage lending in the economy, thus affecting the money supply.

What is meant by open market operations?

Open market operations are actions by the central bank to buy or sell government securities (such as bonds) in the open market. When the central bank buys securities, it injects money into the economy; when it sells them, it withdraws money from circulation.

How is the cash reserve ratio used to influence the money supply?

The cash reserve ratio is the minimum percentage of a bank's deposits that must be kept as reserves. By adjusting this ratio, the central bank can influence the amount of money banks are able to lend, thereby controlling the money supply.

What is the difference between inflation and deflation?

Inflation occurs when there is too much money circulating in the economy, leading to higher prices for goods and services. Deflation, on the other hand, occurs when the money supply is insufficient, leading to lower prices and economic stagnation.

How can the central bank address inflation through monetary policy?

To combat inflation, the central bank can implement restrictive policies such as raising the discount rate, selling government securities through open market operations, increasing the cash reserve ratio, or tightening credit policies to reduce the money supply.

How does selective credit policy work in the context of monetary policy?

Selective credit policy involves the central bank regulating lending practices. During inflationary periods, the central bank may tighten credit by making it harder to obtain loans. In contrast, during deflation, the central bank may loosen credit conditions to encourage borrowing and stimulate economic activity.