By using a dynamic stochastic general equilibrium model, this paper analyzes the impact of different monetary policy tools on the economy and discusses the impulse response of the inflation rate and the output gap in detail under different situation. Evidence shows that price-based monetary policy is better than the quantitative tools in many respects, especially when short-term economic fluctuations emerge. However, quantitative tools are more conducive to the stability of inflation. This paper suggests that the central bank of China can not give up quantitative tools, but should gradually increase the proportion of using price instruments, literally, establishing a regulatory mechanism of monetary policy based on interest rates for short-term adjustment and on the supply of currency for long-term adjustment at the same time.