Monetary policy impacts interest rates from "summary" of Macroeconomics for Business by Lawrence S. Davidson,Andreas Hauskrecht,Jürgen von Hagen
Monetary policy refers to the actions taken by a country's central bank to influence the economy. One of the key tools of monetary policy is the setting of interest rates. When the central bank adjusts interest rates, it can have a significant impact on the economy, particularly on borrowing and spending behavior. Interest rates are the cost of borrowing money, and they play a crucial role in the economy. When interest rates are low, borrowing becomes cheaper, which encourages consumers and businesses to take out loans to finance purchases and investments. This increased borrowing and spending can stimula...
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