Monetary policy is concerned with the money supply to the economy, interest and the amount of credit available to households and firms.
Posts tagged as “interest rates”
This article defines consumption and saving as well as introduces The Average Propensity to Consume (APC) and The Marginal Propensity to Consume (MPC).
A long-term bank loan is provision of finance by the lender to the business for a long period of time. The lender is a commercial bank.
If domestic interest rates decrease, then the domestic currency’s exchange rate is to depreciate against other currencies.
If domestic interest rates increase, then the domestic currency’s exchange rate is to appreciate against other currencies.
Monetary Policy deals with the supply of money in the economy. It is concerned primarily with decisions about interest rates.
In order to achieve economic objectives, the government will affect the economic activities. It will be done by arranging changes in TAXes.
Different businesses on the market will be impacted to a various degree by the government involvement in markets.
Inflation makes planning difficult and results become much less reliable. It is because inflation adds to uncertainty about forecasting the future.
The politics and regulations of businesses have tremendous influence on firms, customers and competitiveness on the market.