Monetary policy is that part of the macroeconomics, which attempts to achieve a set of objectives that are expressed in terms of several macroeconomic variables such as inflation, real output, money supply, exchange rate or employment. As a result, any change in the monetary policy will have an effect on these variables. For instance, monetary policy actions such as changes in the central bank discount rate may have an indirect effect on these variables. Therefore, it has been said that as broader financial markets are quick to incorporate new information, a more direct and contiguous effect...