Banking monetary policy

Before when money was not invented.... what people do??????

They use parter system....

In this system .. people exchange goods for thier needs.. ex. for... they exchange rice with another person who have tomato... if they need.. but at that time needs were limited... 

as we grown from anthropoidape to normal human being... our needs become diffrent we start using technology etc... so we can't use parter system... as there was a complexity in this system... they need such person who is ready to exchange good what they need with the things what they have... this become a complexity...

And as we know... need is the father of inventions..... hence.. what we called today "money" was invented, to replace complexity of parter system...

Money become a symbolic value to exchange goods and services with.. to live life....

As money came now we dont need to search people with the interest in our things....

evolution of money

At First in harrappan culture money was made up of mud (the clod) after that we used metal ... like gold, silver, bronze , steel etc.... Now a days we have money made up of paper with different symbolic values... 

Who issue this money??

In india RBI work for money supply...  RBI decides how much amount of currency required in economy, if it is more than or less than the requirements, RBI uses some steps to overcome the problem ....

To make cash in equilibrium .... some rates are decided by RBI...

CRR, SLR etc.... 

2 objectives of RBI 's monetary policy...

1. price stability

2. growth...

There should be balance betweeen price and growth..

Price stability has two cases...

1. increase of cash in market

2. deficiency of cash in market..

This two should be balanced and it ia a responsibility of RBI...