Definition, Objectives, and Monetary Policy Instruments
Understanding Monetary Policy
Monetary policy is basically a policy that aims to achieve internal balance (high economic growth, price stability, equitable development) and external balance (balance of payments balance) and the achievement of macroeconomic objectives, namely maintaining economic stabilization that can be measured by employment opportunities, price stability and a balanced international balance of payments.
If stability in economic activity is disrupted, monetary policy can be used to restore (stabilization measures). The influence of monetary policy will first be felt by the banking sector, which is then transferred to the real sector. Monetary policy is defined by the plans and actions of a coordinated monetary authority to maintain monetary balance, and stabilize the value of money, encourage smooth production and development, and expand employment opportunities to improve people's lives.
Wikipedia provides a definition of monetary policy with a process undertaken by the government, central bank, or monetary authority of a country to control, supply of money, availability of money, interest rates, in order to achieve a set of orientation goals for economic growth and stability. Where monetary policy is usually known as a choice between expansion policy or contraction policy.
So it can be concluded from the above understanding that monetary policy is all the efforts or actions of the central bank to influence monetary developments (money supply, interest rates, credit and exchange rates) to achieve certain economic goals. As part of macroeconomic policy, the purpose of monetary policy is to help achieve macroeconomic goals including: economic growth, employment opportunities, price stability and balance of payments. The four targets are the objectives / final targets of monetary policy (final target).
Ideally, all monetary policy objectives must be achieved simultaneously and sustainably. However, experience in many countries, including the world, shows that this is difficult to achieve, and there is even a contradictory tendency. For example, contractive monetary policies to curb inflation can have a negative effect on economic growth and job creation.
Types of Monetary Policy
Monetary policy is basically a policy that aims to achieve internal balance (high economic growth, price stability, equitable development) and external balance (balance of payments balance) and the achievement of macroeconomic objectives, namely maintaining economic stabilization that can be measured by employment opportunities, price stability and a balanced international balance of payments.
If stability in economic activity is disrupted, monetary policy can be used to restore (stabilization measures). The influence of monetary policy will first be felt by the banking sector, which is then transferred to the real sector. Monetary policy can be classified into two namely:
Expansive monetary policy (Monetary expansive policy)
Is a policy in order to increase the amount of money in circulation. This policy is carried out to overcome unemployment and increase people's purchasing power (public demand) when the economy experiences a recession or depression. This policy is also called easy monetary policy (easy money policy)
Monetary contractive policy
Is a policy in order to reduce the amount of money in circulation. This policy is carried out when the economy experiences inflation. Also called the tight money policy (tight money policy)
Monetary Policy Objectives
Bank has the objective to achieve and maintain the stability of the value of the rupiah. This objective as stated in Law No. 3 of 2004 article 7 concerning Bank. What is meant by the stability of the value of the rupiah, among others, is the stability of the prices of goods and services reflected in inflation.
To achieve this goal, since 2005 Bank has implemented a monetary policy framework with inflation as the main target of monetary policy (Inflation Targeting Framework) by adopting a free floating exchange rate system. The role of exchange rate stability is very important in achieving price stability and the financial system. Therefore, Bank also operates an exchange rate policy to reduce excessive exchange rate volatility, not to direct the exchange rate to a certain level.
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Monetary Policy Operations and Instruments
Monetary Policy Operations and Instruments
Substitution of money
This policy is to replace old money with new money with a comparison of old money worth Rp. 1000, - replaced with new money with a nominal value of one rupiah. This policy was implemented at the end of the Sukarno policy or the beginning of the Suharto government.
Devaluation
Devaluation is related to the government's policy to reduce the value of domestic money against the value of foreign money.
Monetary Policy Operations
Monetary policy operations consist of monetary instruments, operational targets, intermediate targets, and final targets.
Monetary instruments
Monetary policy can be carried out by implementing monetary policy instruments, which include:
1. Open Market Operations
This instrument is the most important monetary policy tool because it is the main determinant between changes in interest rates and the monetary base and is the main source for influencing fluctuations in the money supply. Open market operations include the act of selling or buying government securities. If you want to increase the money supply, the government will buy government securities. However, if you want the amount of money circulating to decrease, the government will sell government securities to the public. Government securities include, among others, SBI (Bank Indonesia Certificates) and SBPU (Money Market Securities).
Open market operations have two main influences on money market conditions, namely first, increasing the reserves of commercial banks that participate in transactions. This is because in the purchase of securities for example, the central bank will increase the reserves of commercial banks that sell the securities, consequently commercial banks can increase the amount of money in circulation (through the process of creating credit). When the central bank sells securities on the open market, the reserves of commercial banks will decrease. Next these banks were forced to reduce lending, thereby reducing the money supply. The second effect, the act of buying or selling securities will affect the price (and thus also the interest rate) of the securities, thereby reducing the money supply and increasing the interest rate.
Based on its objectives, tebuka market operations are divided into two types namely:
Dynamic open market operation
Aims to change the amount of reserves and monetary base.
Defensive open market operations
Aims to control other factors that can affect the amount of reserves and monetary base.
2. Discount Rate
This policy includes actions to change the interest rate that must be paid by commercial banks in terms of borrowing funds from the central bank. This policy basically aims to influence the discount rate which in turn will affect the money supply through changes in loan interest rates. By increasing the discount, the cost of borrowing funds from the central bank will rise so that it will reduce the desire of commercial banks to lend to the central bank. As a result, the money supply can be reduced or reduced. In addition, the position of the amount of reserves can also be influenced through this instrument. If the discount rate increases, it will increase the cost of borrowing at the bank. This increase in reserves is an indication that the central bank is implementing a strict monetary policy.
3. Stipulation of minimum reserve requirements (minimum reserve requirements)
The mandatory reserve ratio is regulating the amount of money in circulation by playing the amount of bank reserve funds that must be deposited with the government. If the minimum required reserve is lowered, it will cause an increase in the amount of deposits so that the money supply tends to increase and vice versa if the minimum required reserve is increased, it will reduce the amount of deposits which will ultimately reduce the amount of money in circulation. So as to increase the amount of money, the government reduced the mandatory reserve ratio. To decrease the money supply, the government raised the ratio.
4. Moral Appeal (Moral Persuasion)
Moral appeal is a monetary policy to regulate the money supply by appealing to economic actors. This policy was carried out by Bank Indonesia by asking or urging banks to always consider the macroeconomic conditions and micro conditions of each bank in preparing a reality loan expansion plan. This moral persuasion policy is basically intended to encourage banks to always apply the precautionary principle in providing credit,
to reduce the money supply and urge banks to borrow more money from the central bank to increase the money supply to the economy while still giving banks the freedom to grow and develop based on market mechanisms.
Substitution of money
This policy is to replace old money with new money with a comparison of old money worth Rp. 1000, - replaced with new money with a nominal value of one rupiah. This policy was implemented at the end of the Sukarno policy or the beginning of the Suharto government.
Devaluation
Devaluation is related to the government's policy to reduce the value of domestic money against the value of foreign money.
Monetary Policy Operations
Monetary policy operations consist of monetary instruments, operational targets, intermediate targets, and final targets.
Monetary instruments
Monetary policy can be carried out by implementing monetary policy instruments, which include:
1. Open Market Operations
This instrument is the most important monetary policy tool because it is the main determinant between changes in interest rates and the monetary base and is the main source for influencing fluctuations in the money supply. Open market operations include the act of selling or buying government securities. If you want to increase the money supply, the government will buy government securities. However, if you want the amount of money circulating to decrease, the government will sell government securities to the public. Government securities include, among others, SBI (Bank Indonesia Certificates) and SBPU (Money Market Securities).
Open market operations have two main influences on money market conditions, namely first, increasing the reserves of commercial banks that participate in transactions. This is because in the purchase of securities for example, the central bank will increase the reserves of commercial banks that sell the securities, consequently commercial banks can increase the amount of money in circulation (through the process of creating credit). When the central bank sells securities on the open market, the reserves of commercial banks will decrease. Next these banks were forced to reduce lending, thereby reducing the money supply. The second effect, the act of buying or selling securities will affect the price (and thus also the interest rate) of the securities, thereby reducing the money supply and increasing the interest rate.
Based on its objectives, tebuka market operations are divided into two types namely:
Dynamic open market operation
Aims to change the amount of reserves and monetary base.
Defensive open market operations
Aims to control other factors that can affect the amount of reserves and monetary base.
2. Discount Rate
This policy includes actions to change the interest rate that must be paid by commercial banks in terms of borrowing funds from the central bank. This policy basically aims to influence the discount rate which in turn will affect the money supply through changes in loan interest rates. By increasing the discount, the cost of borrowing funds from the central bank will rise so that it will reduce the desire of commercial banks to lend to the central bank. As a result, the money supply can be reduced or reduced. In addition, the position of the amount of reserves can also be influenced through this instrument. If the discount rate increases, it will increase the cost of borrowing at the bank. This increase in reserves is an indication that the central bank is implementing a strict monetary policy.
3. Stipulation of minimum reserve requirements (minimum reserve requirements)
The mandatory reserve ratio is regulating the amount of money in circulation by playing the amount of bank reserve funds that must be deposited with the government. If the minimum required reserve is lowered, it will cause an increase in the amount of deposits so that the money supply tends to increase and vice versa if the minimum required reserve is increased, it will reduce the amount of deposits which will ultimately reduce the amount of money in circulation. So as to increase the amount of money, the government reduced the mandatory reserve ratio. To decrease the money supply, the government raised the ratio.
4. Moral Appeal (Moral Persuasion)
Moral appeal is a monetary policy to regulate the money supply by appealing to economic actors. This policy was carried out by Bank Indonesia by asking or urging banks to always consider the macroeconomic conditions and micro conditions of each bank in preparing a reality loan expansion plan. This moral persuasion policy is basically intended to encourage banks to always apply the precautionary principle in providing credit,
to reduce the money supply and urge banks to borrow more money from the central bank to increase the money supply to the economy while still giving banks the freedom to grow and develop based on market mechanisms.
Moral Encouragement Policy and Monetary Wisdom Tool
Moral Encouragement Policy and Monetary Wisdom Tool
The central bank is able to influence the amount of money in circulation with various forms such as speeches, announcements, and circulars aimed at commercial banks and other monetary actors. The contents of the announcement include a call or an invitation to hold a savings loan
Monetary Wisdom Tool
Monetary policy can be carried out by implementing monetary policy instruments, which include:
Open market operations of rupiah or foreign exchange money
Open market operations are a way of controlling money in circulation by selling or buying government securities. If you want to increase the money supply, the government will buy government securities. However, if you want the amount of money circulating to decrease, the government will sell government securities to the public. Government securities include but are not limited to SBIs or abbreviations from Bank Indonesia Certificates and Money Market Securities (SBPU).
Determination of minimum required reserves
The politics of cash reserves means policies to increase or decrease the cash reserves that must exist in commercial banks. If economic conditions increase in price (inflation), the central bank can increase its minimum cash reserves so that the money in circulation can be reduced. Conversely, if economic conditions are sluggish, the government can reduce its minimum cash reserves, so that the money in circulation increases because of the large number of loans given to the public. As a result of the increase in cash reserves, the ability of commercial banks to provide loans is reduced or commercial banks are unable to provide loans and at the same time idle funds in banks increase.
Determination of the discount rate
Determination of the discount rate is setting the amount of money in circulation by playing the interest rate of the central bank at commercial banks. Commercial banks sometimes have a shortage of money so they have to borrow from the central bank. To make the amount of money increase, the government reduces the interest rate of the central bank, and vice versa raises the interest rate in order to make the money in circulation decrease.
Credit or financing arrangements
Credit or financing arrangements are policies to tighten or facilitate the provision of loans to the public. To regulate economic activities to grow better, the government (Bank Indonesia) can selectively supervise loans with the aim of ensuring that commercial banks provide loans and make investments as desired by the government. For example, to encourage the industrial sector, the central bank can make regulations that require commercial banks to lend part of their funds to industrial sector businesses with light conditions.
Other policies deemed necessary
Besides the policy tools above, there are still more policy tools that can and have been implemented by Indonesia:
Moral persuasion
Moral appeal is a monetary policy to regulate the money supply by appealing to economic actors. Examples such as calling on the lenders to be careful in issuing credit to reduce the money supply and to urge banks to borrow more money from the central bank to increase the money supply to the economy.
Sanering
Sanering is a policy to cut banknotes in circulation into two parts, one part or half of the nominal value being replaced with new banknotes and the other half being replaced with state bonds. This policy occurred during the reign of Sukarno.
The central bank is able to influence the amount of money in circulation with various forms such as speeches, announcements, and circulars aimed at commercial banks and other monetary actors. The contents of the announcement include a call or an invitation to hold a savings loan
Monetary Wisdom Tool
Monetary policy can be carried out by implementing monetary policy instruments, which include:
Open market operations of rupiah or foreign exchange money
Open market operations are a way of controlling money in circulation by selling or buying government securities. If you want to increase the money supply, the government will buy government securities. However, if you want the amount of money circulating to decrease, the government will sell government securities to the public. Government securities include but are not limited to SBIs or abbreviations from Bank Indonesia Certificates and Money Market Securities (SBPU).
Determination of minimum required reserves
The politics of cash reserves means policies to increase or decrease the cash reserves that must exist in commercial banks. If economic conditions increase in price (inflation), the central bank can increase its minimum cash reserves so that the money in circulation can be reduced. Conversely, if economic conditions are sluggish, the government can reduce its minimum cash reserves, so that the money in circulation increases because of the large number of loans given to the public. As a result of the increase in cash reserves, the ability of commercial banks to provide loans is reduced or commercial banks are unable to provide loans and at the same time idle funds in banks increase.
Determination of the discount rate
Determination of the discount rate is setting the amount of money in circulation by playing the interest rate of the central bank at commercial banks. Commercial banks sometimes have a shortage of money so they have to borrow from the central bank. To make the amount of money increase, the government reduces the interest rate of the central bank, and vice versa raises the interest rate in order to make the money in circulation decrease.
Credit or financing arrangements
Credit or financing arrangements are policies to tighten or facilitate the provision of loans to the public. To regulate economic activities to grow better, the government (Bank Indonesia) can selectively supervise loans with the aim of ensuring that commercial banks provide loans and make investments as desired by the government. For example, to encourage the industrial sector, the central bank can make regulations that require commercial banks to lend part of their funds to industrial sector businesses with light conditions.
Other policies deemed necessary
Besides the policy tools above, there are still more policy tools that can and have been implemented by Indonesia:
Moral persuasion
Moral appeal is a monetary policy to regulate the money supply by appealing to economic actors. Examples such as calling on the lenders to be careful in issuing credit to reduce the money supply and to urge banks to borrow more money from the central bank to increase the money supply to the economy.
Sanering
Sanering is a policy to cut banknotes in circulation into two parts, one part or half of the nominal value being replaced with new banknotes and the other half being replaced with state bonds. This policy occurred during the reign of Sukarno.
Capacity to Forecast Inflation
Capacity to Forecast Inflation
In theory, monetary policy can be transmitted through various channels, namely the interest rate channel, the bank credit channel, the company balance sheet channel, the exchange rate channel, the asset price channel, and the expectation channel. By going through these channels, monetary policy will be transmitted and affect the financial sector and the real sector after some time (lag of monument policy).
In addition to monetary policies that are "direct" as above, the central bank can also influence its ultimate goal "indirectly", namely through various regulations and appeals (moral suassion) to the banking sector to accelerate the transmission mechanism of monetary policy. In exercising monetary control, Bank Indonesia is given authority to use monetary instruments in the form of but not limited to open market operations, setting discount rates, setting minimum reserve requirements, and arranging credit or financing.
There are several conditions that must be met so that monetary policy can achieve success in its implementation. The prerequisites include:
Central Bank Indepensi.
Actually there is no Central Bank that can be truly independent without interference from the government. However, there are policy instruments that are not influenced by the government, for example through fiscal policy.
Focus on goals.
Controlling inflation is only one of several other targets that the Central Bank intends to achieve. Other targets sometimes conflict with inflation control goals, such as economic growth targets, employment opportunities, balance of payments, and exchange rates. Therefore, the Central Bank should not set other targets and focus on the main target of inflation control.
Capacity to forecast inflation.
The Central Bank absolutely must have the ability to predict inflation accurately, so that it can set the inflation target to be achieved.
Instrument monitoring
The Central Bank must have the ability to oversee monetary policy instruments.
Implement consistently and transparently.
With the consistent and transparent implementation of the inflation target, the public's trust in the policies stipulated will increase.
Monetary Policy Instruments
The instruments that can be utilized by the government in efforts to make monetary policy include:
Open Market Operations Policy
Open market operations are one of the policies decided by the central bank to increase or decrease the amount of money in circulation. This policy was adopted by selling SBIs (Bank Indonesia Certificates) or buying securities in the capital market.
Discount Policy
Discount policy is a reduction or increase in the amount of money circulating in the community by changing commercial bank discounts. If the central bank has calculated the amount of money in circulation exceeds the need (a symptom of inflation), then the central bank; will take policies to raise interest rates. With this policy, it will automatically stimulate the arrival of people to save money.
Cash Reserve Policy
The central bank can draw up regulations to regulate (increase and decrease) existing cash reserves (cash ratio). Commercial banks accept money from customers (savings, current accounts, certificates of deposit, etc.) which of course there is a certain percentage of the currency deposited by the customer.
Strict Credit Policy
Credit is still given by commercial banks, but the grant must be based on conditions covering 5C, namely Character, Capability, Collateral, Capital, and Condition of Economy. With tetat credit economic policy, an efficient amount of money can easily be monitored. This kind of policy can also be taken when the economy is experiencing symptoms of inflation.
In theory, monetary policy can be transmitted through various channels, namely the interest rate channel, the bank credit channel, the company balance sheet channel, the exchange rate channel, the asset price channel, and the expectation channel. By going through these channels, monetary policy will be transmitted and affect the financial sector and the real sector after some time (lag of monument policy).
In addition to monetary policies that are "direct" as above, the central bank can also influence its ultimate goal "indirectly", namely through various regulations and appeals (moral suassion) to the banking sector to accelerate the transmission mechanism of monetary policy. In exercising monetary control, Bank Indonesia is given authority to use monetary instruments in the form of but not limited to open market operations, setting discount rates, setting minimum reserve requirements, and arranging credit or financing.
There are several conditions that must be met so that monetary policy can achieve success in its implementation. The prerequisites include:
Central Bank Indepensi.
Actually there is no Central Bank that can be truly independent without interference from the government. However, there are policy instruments that are not influenced by the government, for example through fiscal policy.
Focus on goals.
Controlling inflation is only one of several other targets that the Central Bank intends to achieve. Other targets sometimes conflict with inflation control goals, such as economic growth targets, employment opportunities, balance of payments, and exchange rates. Therefore, the Central Bank should not set other targets and focus on the main target of inflation control.
Capacity to forecast inflation.
The Central Bank absolutely must have the ability to predict inflation accurately, so that it can set the inflation target to be achieved.
Instrument monitoring
The Central Bank must have the ability to oversee monetary policy instruments.
Implement consistently and transparently.
With the consistent and transparent implementation of the inflation target, the public's trust in the policies stipulated will increase.
Monetary Policy Instruments
The instruments that can be utilized by the government in efforts to make monetary policy include:
Open Market Operations Policy
Open market operations are one of the policies decided by the central bank to increase or decrease the amount of money in circulation. This policy was adopted by selling SBIs (Bank Indonesia Certificates) or buying securities in the capital market.
Discount Policy
Discount policy is a reduction or increase in the amount of money circulating in the community by changing commercial bank discounts. If the central bank has calculated the amount of money in circulation exceeds the need (a symptom of inflation), then the central bank; will take policies to raise interest rates. With this policy, it will automatically stimulate the arrival of people to save money.
Cash Reserve Policy
The central bank can draw up regulations to regulate (increase and decrease) existing cash reserves (cash ratio). Commercial banks accept money from customers (savings, current accounts, certificates of deposit, etc.) which of course there is a certain percentage of the currency deposited by the customer.
Strict Credit Policy
Credit is still given by commercial banks, but the grant must be based on conditions covering 5C, namely Character, Capability, Collateral, Capital, and Condition of Economy. With tetat credit economic policy, an efficient amount of money can easily be monitored. This kind of policy can also be taken when the economy is experiencing symptoms of inflation.
Monetary Policy Function
Monetary Policy Function
In its implementation, Bank Indonesia has the authority to conduct monetary policy through setting monetary targets (such as money supply or interest rates) with the main objective of maintaining the inflation rate target set by the Government. Operationally, controlling these monetary targets uses instruments, including open market operations on the money market both in rupiah and foreign currencies, setting discount rates, setting minimum reserve requirements, and arranging credit or financing. Bank Indonesia can also use monetary control methods based on Sharia Principles.
In general, the objectives of monetary policy include:
Circulate the currency as a medium of exchange (medium of exchange) in the economy.
Maintaining a balance between economic liquidity needs and price level stability.
Optimal liquidity distribution in order to achieve the desired economic growth in various economic sectors
Help the government carry out its obligations which cannot be realized through normal sources of revenue.
Maintaining Economic Stability This means that the flow of goods and services is balanced with the growth of goods and services available.
Maintaining Price Stability. The price of an item is the result of interaction between the amount of money in circulation and the amount of money available in the market.
Increasing employment opportunities, when the economy is stable employers will make investments to increase the amount of goods and services so that the investment will open new jobs so as to expand employment opportunities.
Improving the Trade Balance of Community Work By increasing exports and reducing imports from abroad entering the country or vice versa.
Also Read Articles That May Be Associated: Financial Institutions: Understanding, Benefits, Functions, And Types With Examples In Complete
Monetary Policy Function
From the notion of monetary policy is a policy taken by the government (Central Bank) to increase and decrease the amount of money in circulation.
Since 1945, monetary policy has only been used as economic policy to achieve short-term economic stability. The fiscal policy is used in long-term economic control. But at this time monetary policy is the main policy used for short-term and long-term economic control. To influence the money supply, the government can implement a tight money policy and a loose money policy.
1. Tight Money Policy, namely the policy of the Central Bank to reduce the amount of money in circulation by:
a. Increase interest rates
b. Selling securities
c. Increase in cash reserves
d. Limit lending
2. Easy Money Policy, which is a policy carried out by the Central Bank to increase the amount of money in circulation by:
a. Lower interest rates
b. Buy securities
c. Decrease cash reserves
d. Give loose credit.
Considering the specific tasks carried out by Bank Indonesia, Bank Indonesia cannot fully control inflation, especially inflationary pressure originating from the supply side (cost push inflation). Bank Indonesia, through monetary policy, can influence inflation on the demand side, such as investment and public consumption. For example, a policy of increasing interest rates can 'redeem' public and government spending so that it can reduce overall demand, which in turn can reduce inflation. In addition, the increase in interest rates can strengthen the exchange rate through an increase (positive) interest rate differential.
Likewise, Bank Indonesia can influence public expectations through consistent and credible policies. The hope is that the inflation target of Bank Indonesia is referred to by the public and economic actors so that the inflation that occurs can be the same or close to the inflation target. If this condition occurs, then the cost of monetary control can be minimized.
In its implementation, Bank Indonesia has the authority to conduct monetary policy through setting monetary targets (such as money supply or interest rates) with the main objective of maintaining the inflation rate target set by the Government. Operationally, controlling these monetary targets uses instruments, including open market operations on the money market both in rupiah and foreign currencies, setting discount rates, setting minimum reserve requirements, and arranging credit or financing. Bank Indonesia can also use monetary control methods based on Sharia Principles.
In general, the objectives of monetary policy include:
Circulate the currency as a medium of exchange (medium of exchange) in the economy.
Maintaining a balance between economic liquidity needs and price level stability.
Optimal liquidity distribution in order to achieve the desired economic growth in various economic sectors
Help the government carry out its obligations which cannot be realized through normal sources of revenue.
Maintaining Economic Stability This means that the flow of goods and services is balanced with the growth of goods and services available.
Maintaining Price Stability. The price of an item is the result of interaction between the amount of money in circulation and the amount of money available in the market.
Increasing employment opportunities, when the economy is stable employers will make investments to increase the amount of goods and services so that the investment will open new jobs so as to expand employment opportunities.
Improving the Trade Balance of Community Work By increasing exports and reducing imports from abroad entering the country or vice versa.
Also Read Articles That May Be Associated: Financial Institutions: Understanding, Benefits, Functions, And Types With Examples In Complete
Monetary Policy Function
From the notion of monetary policy is a policy taken by the government (Central Bank) to increase and decrease the amount of money in circulation.
Since 1945, monetary policy has only been used as economic policy to achieve short-term economic stability. The fiscal policy is used in long-term economic control. But at this time monetary policy is the main policy used for short-term and long-term economic control. To influence the money supply, the government can implement a tight money policy and a loose money policy.
1. Tight Money Policy, namely the policy of the Central Bank to reduce the amount of money in circulation by:
a. Increase interest rates
b. Selling securities
c. Increase in cash reserves
d. Limit lending
2. Easy Money Policy, which is a policy carried out by the Central Bank to increase the amount of money in circulation by:
a. Lower interest rates
b. Buy securities
c. Decrease cash reserves
d. Give loose credit.
Considering the specific tasks carried out by Bank Indonesia, Bank Indonesia cannot fully control inflation, especially inflationary pressure originating from the supply side (cost push inflation). Bank Indonesia, through monetary policy, can influence inflation on the demand side, such as investment and public consumption. For example, a policy of increasing interest rates can 'redeem' public and government spending so that it can reduce overall demand, which in turn can reduce inflation. In addition, the increase in interest rates can strengthen the exchange rate through an increase (positive) interest rate differential.
Likewise, Bank Indonesia can influence public expectations through consistent and credible policies. The hope is that the inflation target of Bank Indonesia is referred to by the public and economic actors so that the inflation that occurs can be the same or close to the inflation target. If this condition occurs, then the cost of monetary control can be minimized.
Hooke's Law for Spring
Hooke's Law for Spring
6. Hooke's Law
Hooke's Law states that "if the dance style does not exceed the elastic limit of the spring, then the increase in the length of the spring is directly proportional to the tensile force". Mathematically written as follows.
Information:
F = external force applied (N)
k = spring constant (N / m)
Δx = Increase in spring length from its normal position (m)
Hooke's Law for Spring
6a. Series Arrangement
If two springs that have the same spring constant are arranged in series, then the spring length becomes 2x. Therefore, the spring equation is as follows:
Information:
Ks = Spring Equation
k = spring constant (N / m)
Whereas the equations for n springs whose constants and series are arranged are written as follows.
Information:
n = Number of springs
6b. Parallel Arrangement
If the springs are arranged in parallel, the length of the springs will remain the same as before, while the width of the springs will be more than 2x when the springs are arranged in two pieces. The spring equations for the two springs are arranged in parallel, namely:
Information:
Kp = Spring arrangement parallel arrangement
k = spring constant (N / m)
Whereas the equation for n springs which are the same constants and arranged in parallel, will produce stronger springs because the spring constants become larger. The spring equation can be written as follows.
Information:
n = Number of springs
Examples of Hooke's Legal Questions
A spring has an increase of 0.25 meters in length after applying force. If the spring reads 400 N / m. How much force does this spring have?
known :
x = 0.25 m
k = 400 N / m
asked F ....?
Answer
F = k. x
F = 400 N / m x 0.25 m
F = 100 N
So the force applied to the spring is 100 Newtons.
That is the full review Hopefully what is discussed above is useful for readers. That is all and thank you.
6. Hooke's Law
Hooke's Law states that "if the dance style does not exceed the elastic limit of the spring, then the increase in the length of the spring is directly proportional to the tensile force". Mathematically written as follows.
Information:
F = external force applied (N)
k = spring constant (N / m)
Δx = Increase in spring length from its normal position (m)
Hooke's Law for Spring
6a. Series Arrangement
If two springs that have the same spring constant are arranged in series, then the spring length becomes 2x. Therefore, the spring equation is as follows:
Information:
Ks = Spring Equation
k = spring constant (N / m)
Whereas the equations for n springs whose constants and series are arranged are written as follows.
Information:
n = Number of springs
6b. Parallel Arrangement
If the springs are arranged in parallel, the length of the springs will remain the same as before, while the width of the springs will be more than 2x when the springs are arranged in two pieces. The spring equations for the two springs are arranged in parallel, namely:
Information:
Kp = Spring arrangement parallel arrangement
k = spring constant (N / m)
Whereas the equation for n springs which are the same constants and arranged in parallel, will produce stronger springs because the spring constants become larger. The spring equation can be written as follows.
Information:
n = Number of springs
Examples of Hooke's Legal Questions
A spring has an increase of 0.25 meters in length after applying force. If the spring reads 400 N / m. How much force does this spring have?
known :
x = 0.25 m
k = 400 N / m
asked F ....?
Answer
F = k. x
F = 400 N / m x 0.25 m
F = 100 N
So the force applied to the spring is 100 Newtons.
That is the full review Hopefully what is discussed above is useful for readers. That is all and thank you.
Hooke's Law Application
Hooke's Law Application
In the application of Hooke's law is very closely related to objects whose working principle uses springs and elastic ones. Hooke's legal principle has been applied to some of the following items.
Microscope whose function is to see tiny microorganisms that can not be seen by the naked eye
Telescope whose function is to see objects that are located far away so that it looks close, like an object in space
Gauges measuring the acceleration of Earth's gravity
A watch that uses a peer as a timer
The gauze or chronometer used to determine the line or position of the ship in the sea
Connection sticks gear shift vehicles both motorcycles and cars
Spring swing
Some of the items mentioned above have an important role in human life. In other words, Hooke's idea had a positive impact on the quality of life of the maunsia.
Sounds of Hooke's Law
Hooke's law states that the magnitude of the force acting on an object is proportional to the increase in the length of the object. Of course this applies to elastic differences (can stretch).
F = k. x
Information :
F = force acting on the spring (N)
k = spring constant (N / m)
x = increase in spring length (m)
Hooke's Law Formula
Magnitudes and Formulas in Hooke's Law and Elasticity
1. Voltage
Voltage is a condition where an object experiences a long increase when an object is exerted force on one end while the other end is held. Example. a piece of wire with a cross-sectional area of x m2, with an initial length of x meters drawn
with a force of N at one end while at the other end being held the wire will increase in length by x meters. This phenomenon describes a voltage which in physics is symbolized by σ and can be written mathematically as follows.
Information:
F = Force (N)
A = Cross-sectional area (m2)
σ = Voltage (N / m2 or Pa)
2. Strain
Strain is a ratio between the length of the wire in x meters and the initial length of the wire in x meters. This strain can occur because the force applied to the object or the wire is removed, so that the wire returns to its original shape.
This relationship can be written mathematically as follows:
Information:
e = strain
ΔL = Increase in length (m)
Lo = Initial length (m)
In accordance with the above equation, strain (e) has no units due to the increase in length (ΔL) and initial length (Lo) are quantities with the same unit.
3. Modulus of Elasticity (Modulus Young)
In physics, the modulus of elasticity is symbolized by E. The modulus of elasticity describes a ratio between stress and strain experienced by a material. In other words, elastic modulus is proportional to stress and inversely proportional to strain.
Information:
E = Modulus of elasticity (N / m)
e = strain
σ = Voltage (N / m2 or Pa)
4. Compression
Compression is a state that is almost similar to strain. The difference lies in the direction of movement of the molecule after being applied to the force. Unlike the case in a strain where the object molecules will be pushed out after being given a force. In compression, after being given a force, the object's molecules will be pushed in (compress).
5. Relationship Between Tensile Strength and Modulus of Elasticity
When written mathematically, the relationship between attraction and modulus of elasticity includes:
Information:
F = Force (N)
E = Modulus of elasticity (N / m)
e = strain
σ = Voltage (N / m2 or Pa)
A = Cross-sectional area (m2)
E = Modulus of elasticity (N / m)
ΔL = Increase in length (m)
Lo = Initial length (m)
In the application of Hooke's law is very closely related to objects whose working principle uses springs and elastic ones. Hooke's legal principle has been applied to some of the following items.
Microscope whose function is to see tiny microorganisms that can not be seen by the naked eye
Telescope whose function is to see objects that are located far away so that it looks close, like an object in space
Gauges measuring the acceleration of Earth's gravity
A watch that uses a peer as a timer
The gauze or chronometer used to determine the line or position of the ship in the sea
Connection sticks gear shift vehicles both motorcycles and cars
Spring swing
Some of the items mentioned above have an important role in human life. In other words, Hooke's idea had a positive impact on the quality of life of the maunsia.
Sounds of Hooke's Law
Hooke's law states that the magnitude of the force acting on an object is proportional to the increase in the length of the object. Of course this applies to elastic differences (can stretch).
F = k. x
Information :
F = force acting on the spring (N)
k = spring constant (N / m)
x = increase in spring length (m)
Hooke's Law Formula
Magnitudes and Formulas in Hooke's Law and Elasticity
1. Voltage
Voltage is a condition where an object experiences a long increase when an object is exerted force on one end while the other end is held. Example. a piece of wire with a cross-sectional area of x m2, with an initial length of x meters drawn
with a force of N at one end while at the other end being held the wire will increase in length by x meters. This phenomenon describes a voltage which in physics is symbolized by σ and can be written mathematically as follows.
Information:
F = Force (N)
A = Cross-sectional area (m2)
σ = Voltage (N / m2 or Pa)
2. Strain
Strain is a ratio between the length of the wire in x meters and the initial length of the wire in x meters. This strain can occur because the force applied to the object or the wire is removed, so that the wire returns to its original shape.
This relationship can be written mathematically as follows:
Information:
e = strain
ΔL = Increase in length (m)
Lo = Initial length (m)
In accordance with the above equation, strain (e) has no units due to the increase in length (ΔL) and initial length (Lo) are quantities with the same unit.
3. Modulus of Elasticity (Modulus Young)
In physics, the modulus of elasticity is symbolized by E. The modulus of elasticity describes a ratio between stress and strain experienced by a material. In other words, elastic modulus is proportional to stress and inversely proportional to strain.
Information:
E = Modulus of elasticity (N / m)
e = strain
σ = Voltage (N / m2 or Pa)
4. Compression
Compression is a state that is almost similar to strain. The difference lies in the direction of movement of the molecule after being applied to the force. Unlike the case in a strain where the object molecules will be pushed out after being given a force. In compression, after being given a force, the object's molecules will be pushed in (compress).
5. Relationship Between Tensile Strength and Modulus of Elasticity
When written mathematically, the relationship between attraction and modulus of elasticity includes:
Information:
F = Force (N)
E = Modulus of elasticity (N / m)
e = strain
σ = Voltage (N / m2 or Pa)
A = Cross-sectional area (m2)
E = Modulus of elasticity (N / m)
ΔL = Increase in length (m)
Lo = Initial length (m)
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