NATIONAL OPEN UNIVERSITY OF NIGERIA FACUL
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TY SOCIAL SCIENCES
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MONETARY THEORY AND POLICY z z z
ECO 343 z
Course Developer ADEGBOL z z
A Mufutau Benjamin
z z
Economics Department z
Course Editor z
Dr. Ganiyat A. Adesina-Uthman Acma, Fmnes, Fce
z z z z z z
Economics Department Nation z z
al Open University of Nigeria.
z z z z
Course Reviewer z
Dr. ADEGBOLA Mufutau Benjamin
z z z z
Department of Economics, z z
Ekiti State University. z z
1
, COURSE GUIDE z
CONTENT
Introduction ---------------------------------------------------------------------------- 2
Course Content- - ---------------------------------------------------------------------- 3
z z z
Course Aims---------------------------------------------------------------------------- 3
z
Course Objectives --------------------------------------------------------------------- 3
z
Working through This Course -------------------------------------------------------- 5
z z z
Course Materials ----------------------------------------------------------------------- 5
z
Study Units ----------------------------------------------------------------------------- 5
z
Textbooks and References ------------------------------------------------------------ 7
z z
Assignment File------------------------------------------------------------------------ 8
z
Presentation Schedule ----------------------------------------------------------------- 9
z
Assessment ----------------------------------------------------------------------------- 9
Tutor-Marked Assignment (TMAs) ------------------------------------------------- 9
z z
Final Examination and Gradingv - - - - - - - - - - - - - - - - - - - - - - - - - - -
z z z 10
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Course Marking Scheme - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --
z z 10
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Course Overview- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - -
z 11
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How to Get the Most from This Course- - - - - - - - - - - - - - -- - - - - - -
z z z z z z z 12 z z z z z z z z z z zz z z z z z z z z z
Tutors and Tutorials- - - - - - - - - - - - - - -- - - - - -- - - - - - - - - - - - - -
z z z z z z z z z z z z zz 15z z z z z z z z z z z z z z z z z z z z z
Summary- - - - - - - - - - - - - - -- - - - - - - - - - - - - - -- - - - - - - - - - -
z z z z z z z z z z zz z z z 15
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2
, Introduction
Welcome to ECO: 343 MONETARY THEORY AND POLICY. z z z z z z z
ECO 343: Monetary Theory and Policy is a three-credit and one-
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semester undergraduate course for Economics student. The course is made up of nineteen
z z z z z z z z z z z z z
units spread across fifteen lectures weeks. This course guide gives you an insight to monet
z z z z z z z z z z z z z z
ary theory and policy in an elementary way and how to study the economy in larger dimens
z z z z z z z z z z z z z z z z
ion. It tells you about the course materials and how you can work your way through these m
z z z z z z z z z z z z z z z z z
aterials. It suggests some general guidelines for the amount of time required of you on each
z z z z z z z z z z z z z z z
zunit in order to achieve the course aims and objectives successfully. Answers to your tutor
z z z z z z z z z z z z z z z
marked assignments (TMAs) are therein already.
z z z z z
Course Content z
This course is basically on monetary theory and policy and the topics covered include the an
z z z z z z z z z z z z z z z
alysis of monetary policy, monetary policy: instruments and types, changes in the value of m
z z z z z z z z z z z z z z
oney: the quantity theory of money and its variants, supply and demand for money and other
z z z z z z z z z z z z z z z
Keynesian approaches of demand for money.
z z z z z z
Course Aims z
The aims of this course is to give you in-
z z z z z z z z z
depth understanding of monetary policy analysis as regards
z z z z z z z
• Fundamental concept of monetary policy z z z z
• To familiarize students with monetary policy instruments and types
z z z z z z z z
• To stimulate student’s knowledge on changes in the value of money
z z z z z z z z z z
• To make the students to understand supply and demand for money.
z z z z z z z z z z
• To expose the students to rudimentary analysis of other Keynesian approaches of d
z z z z z z z z z z z z
emand for money. z z
Course Objectives z
To achieve the aims of this course, there are overall objectives which the course is out to ach
z z z z z z z z z z z z z z z z z
ieve though, there are set out objectives for each unit. The unit objectives are included at the
z z z z z z z z z z z z z z z z z
beginning of a unit; you should read them before you start working through the unit. You ma
z z z z z z z z z z z z z z z z
y want to refer to them during your study of the unit to check on your progress. You should a
z z z z z z z z z z z z z z z z z z z
lways look at the unit objectives after completing a unit. This is to assist the students in acco
z z z z z z z z z z z z z z z z z
mplishing the tasks entailed in this course. In this way, you can be sure you have done what w
z z z z z z z z z z z z z z z z z z
as required of you by the unit. The objectives serves as study guides,
z z z z z z z z z z z z
3
, such that student could know if he is able to grab the knowledge of each unit through the sets
z z z z z z z z z z z z z z z z z z z
of objectives in each one. At the end of the course period, the students are expected to be able
z z z z z z z z z z z z z z z z z z z
to:
• Define and understand the meaning of monetary policy
z z z z z z z
• Know the objectives or goals of monetary policy
z z z z z z z
• Define and understand the Full Employment and Economic Growth
z z z z z z z z
• Understand the relationship between Full Employment, Price Stability and Balance o
z z z z z z z z z z
f Payment.
z
• Understand Price Stability and Balance of Payment
z z z z z z
• Define and understand the term Targets of Monetary Policy
z z z z z z z z
• Understand the meaning of Market yield on Equity
z z z z z z z
• Know the basic indicators of Monetary Policy
z z z z z z
• Define and understand monetary strategies in Nigeria
z z z z z z
• Understand Effectiveness of monetary policy in Nigeria
z z z z z z
• Understand the overview and framework for monetary policy in Nigeria
z z z z z z z z z
• Define and understand the meaning of macroeconomics as a field of study
z z z z z z z z z z z
• Know the basic macroeconomics concepts
z z z z
• History of Monetary Policy
z z z
• Understand the role of monetary policy in a developing economy
z z z z z z z z z
• Know the limitations of monetary policy in less developing countries.
z z z z z z z z z
• Understand Keynes reformulated quantity theory of money
z z z z z z
• Know the superiority of the Keynesian theory over the traditional quantity theory of m
z z z z z z z z z z z z z
oney
• Know the criticisms of keynes theory of money and prices
z z z z z z z z z
• Define and understand the concepts and measures of money supply
z z z z z z z z z
• Know the important facts about measures of money supply
z z z z z z z z
• Know the Keynesian approach to demand for money
z z z z z z z
• Understand the motives of holding money z z z z z
• Define and understand the Post Keynesian approach of demand for money
z z z z z z z z z z
• Know the tobin’s portfolio and baumol’s inventory approach to demand for money
z z z z z z z z z z z
4
z z z z z
TY SOCIAL SCIENCES
z z
MONETARY THEORY AND POLICY z z z
ECO 343 z
Course Developer ADEGBOL z z
A Mufutau Benjamin
z z
Economics Department z
Course Editor z
Dr. Ganiyat A. Adesina-Uthman Acma, Fmnes, Fce
z z z z z z
Economics Department Nation z z
al Open University of Nigeria.
z z z z
Course Reviewer z
Dr. ADEGBOLA Mufutau Benjamin
z z z z
Department of Economics, z z
Ekiti State University. z z
1
, COURSE GUIDE z
CONTENT
Introduction ---------------------------------------------------------------------------- 2
Course Content- - ---------------------------------------------------------------------- 3
z z z
Course Aims---------------------------------------------------------------------------- 3
z
Course Objectives --------------------------------------------------------------------- 3
z
Working through This Course -------------------------------------------------------- 5
z z z
Course Materials ----------------------------------------------------------------------- 5
z
Study Units ----------------------------------------------------------------------------- 5
z
Textbooks and References ------------------------------------------------------------ 7
z z
Assignment File------------------------------------------------------------------------ 8
z
Presentation Schedule ----------------------------------------------------------------- 9
z
Assessment ----------------------------------------------------------------------------- 9
Tutor-Marked Assignment (TMAs) ------------------------------------------------- 9
z z
Final Examination and Gradingv - - - - - - - - - - - - - - - - - - - - - - - - - - -
z z z 10
z z z z z z z z z z z z z z z z z z z z z z z z z z z
Course Marking Scheme - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --
z z 10
z z z z z z z z z z z z z z z z z z z z z z z z z z z zz z z z
Course Overview- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - -
z 11
z z z z z z z z z z z z z z z z z z z z z z z z z z zz z z z z z z z z
How to Get the Most from This Course- - - - - - - - - - - - - - -- - - - - - -
z z z z z z z 12 z z z z z z z z z z zz z z z z z z z z z
Tutors and Tutorials- - - - - - - - - - - - - - -- - - - - -- - - - - - - - - - - - - -
z z z z z z z z z z z z zz 15z z z z z z z z z z z z z z z z z z z z z
Summary- - - - - - - - - - - - - - -- - - - - - - - - - - - - - -- - - - - - - - - - -
z z z z z z z z z z zz z z z 15
z z z z z z z z z z z z z z z z z z z z z z z z
2
, Introduction
Welcome to ECO: 343 MONETARY THEORY AND POLICY. z z z z z z z
ECO 343: Monetary Theory and Policy is a three-credit and one-
z z z z z z z z z z
semester undergraduate course for Economics student. The course is made up of nineteen
z z z z z z z z z z z z z
units spread across fifteen lectures weeks. This course guide gives you an insight to monet
z z z z z z z z z z z z z z
ary theory and policy in an elementary way and how to study the economy in larger dimens
z z z z z z z z z z z z z z z z
ion. It tells you about the course materials and how you can work your way through these m
z z z z z z z z z z z z z z z z z
aterials. It suggests some general guidelines for the amount of time required of you on each
z z z z z z z z z z z z z z z
zunit in order to achieve the course aims and objectives successfully. Answers to your tutor
z z z z z z z z z z z z z z z
marked assignments (TMAs) are therein already.
z z z z z
Course Content z
This course is basically on monetary theory and policy and the topics covered include the an
z z z z z z z z z z z z z z z
alysis of monetary policy, monetary policy: instruments and types, changes in the value of m
z z z z z z z z z z z z z z
oney: the quantity theory of money and its variants, supply and demand for money and other
z z z z z z z z z z z z z z z
Keynesian approaches of demand for money.
z z z z z z
Course Aims z
The aims of this course is to give you in-
z z z z z z z z z
depth understanding of monetary policy analysis as regards
z z z z z z z
• Fundamental concept of monetary policy z z z z
• To familiarize students with monetary policy instruments and types
z z z z z z z z
• To stimulate student’s knowledge on changes in the value of money
z z z z z z z z z z
• To make the students to understand supply and demand for money.
z z z z z z z z z z
• To expose the students to rudimentary analysis of other Keynesian approaches of d
z z z z z z z z z z z z
emand for money. z z
Course Objectives z
To achieve the aims of this course, there are overall objectives which the course is out to ach
z z z z z z z z z z z z z z z z z
ieve though, there are set out objectives for each unit. The unit objectives are included at the
z z z z z z z z z z z z z z z z z
beginning of a unit; you should read them before you start working through the unit. You ma
z z z z z z z z z z z z z z z z
y want to refer to them during your study of the unit to check on your progress. You should a
z z z z z z z z z z z z z z z z z z z
lways look at the unit objectives after completing a unit. This is to assist the students in acco
z z z z z z z z z z z z z z z z z
mplishing the tasks entailed in this course. In this way, you can be sure you have done what w
z z z z z z z z z z z z z z z z z z
as required of you by the unit. The objectives serves as study guides,
z z z z z z z z z z z z
3
, such that student could know if he is able to grab the knowledge of each unit through the sets
z z z z z z z z z z z z z z z z z z z
of objectives in each one. At the end of the course period, the students are expected to be able
z z z z z z z z z z z z z z z z z z z
to:
• Define and understand the meaning of monetary policy
z z z z z z z
• Know the objectives or goals of monetary policy
z z z z z z z
• Define and understand the Full Employment and Economic Growth
z z z z z z z z
• Understand the relationship between Full Employment, Price Stability and Balance o
z z z z z z z z z z
f Payment.
z
• Understand Price Stability and Balance of Payment
z z z z z z
• Define and understand the term Targets of Monetary Policy
z z z z z z z z
• Understand the meaning of Market yield on Equity
z z z z z z z
• Know the basic indicators of Monetary Policy
z z z z z z
• Define and understand monetary strategies in Nigeria
z z z z z z
• Understand Effectiveness of monetary policy in Nigeria
z z z z z z
• Understand the overview and framework for monetary policy in Nigeria
z z z z z z z z z
• Define and understand the meaning of macroeconomics as a field of study
z z z z z z z z z z z
• Know the basic macroeconomics concepts
z z z z
• History of Monetary Policy
z z z
• Understand the role of monetary policy in a developing economy
z z z z z z z z z
• Know the limitations of monetary policy in less developing countries.
z z z z z z z z z
• Understand Keynes reformulated quantity theory of money
z z z z z z
• Know the superiority of the Keynesian theory over the traditional quantity theory of m
z z z z z z z z z z z z z
oney
• Know the criticisms of keynes theory of money and prices
z z z z z z z z z
• Define and understand the concepts and measures of money supply
z z z z z z z z z
• Know the important facts about measures of money supply
z z z z z z z z
• Know the Keynesian approach to demand for money
z z z z z z z
• Understand the motives of holding money z z z z z
• Define and understand the Post Keynesian approach of demand for money
z z z z z z z z z z
• Know the tobin’s portfolio and baumol’s inventory approach to demand for money
z z z z z z z z z z z
4
