Impact of Monetary Policy on Gross Domestic Product (GDP)
Keywords:inflation rate, gross domestic product, interest rate, money supply
This article explores the impact of monetary policy on gross domestic product (GDP) of the state. There is an immense effect of monetary policy on GDP of the country. In this regard variables have been studied to prove the hypothesis. The data of past 10 years from 2005 to 2014 has been used for driving the result. To determine the relationship between two exist regression and correlation technique has been used. The study proves that money supply, interest rate and inflation greatly affect the GDP. There are various unknown factor that impact on GDP. Now for some years monetary policy of Pakistan is very supportive and promoting the objective of price stability and economic growth and it is achieving its objective by targeting monetary aggregates in accordance with GDP growth and inflation target set by the Government.
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