Economic Policies / Natural Market Failure (B_S2M3)

This module provides experience in research and application for understanding and addressing sources of market failure; structural market failure; transactional and natural market failure in the process of economic policy making.

What is Monetary Policy? The actions of a central bank, currency board, or other regulatory committees that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as increasing the interest rate, or changing the amount of money banks need to keep in the vault (bank reserves).

In the United States, the Federal Reserve is in charge of monetary policy. Monetary policy is one of the ways that the U.S. government attempts to control the economy. If the money supply grows too fast, the rate of inflation will increase; if the growth of the money supply is slowed too much, then economic growth may also slow. In general, the U.S. sets inflation targets that are meant to maintain steady inflation of 2% to 3%.

What are the Objectives of Monetary Policy?
The Reserve Bank Board sets interest rates so as to achieve the following objectives:
• the stability of the currency
• the maintenance of full employment
• the economic prosperity and welfare of the people

Upon the completion of this module, users will be able to:
• Research and apply theoretical and practical knowledge of economics in investigating the issues and crises related to market failure in organisations and countries develop appropriate economic solutions and policies.

TIME: Up to 2 Hours

• No prerequisites.
• No materials distributed.
• No formal assessments required.
  • S2. Economics- Lecture 3 - Economic Policies / Natural Market Failure
  • S2. Economics - Course Linkage Map
  • S2. Economics - Course Linkage Table
Completion rules
  • All units must be completed
  • Leads to a certification with a duration: Forever