Monetaryfreedom means take away from the government everything that concerns monetaryissues. Monetaryfreedom is linked to conceptsof monetary economics and monetarism. The first is a discipline that permitsthe analysis of money and its related function as a medium of exchange, avaluable unit and a cost unit. The second one is the control of the governmenton current money. The monetary freedom can be measured based on two factors:the price stability (inflation) and the price control.
– Inflation:is monetary phenomenon, an increase in the general price level for buying goodsand service. It can happen within a certain period of time. Its effect is aloss of money value. Basically, it means ”too much money chasing too fewgoods.”- Pricecontrol: is when the government decides to limit prices of goods in the market.This can happen due to some facts: government wants to avoid consumer’sexploitation by suppliers, wants to control the rate of inflation, wants tocontrol the supply. (ensure a shortage).
Monetaryfreedom is a combination of these two measures. Inflationand price control may lead to significant consequences and distortion of marketactivity. In order to have monetary freedom, government’sfunction should be to safeguard property rights, maintain price stability,fight inflation so that markets can expand.