What is the relationship between monetary policy and interest rates?

The relationship between monetary policy and interest rates is the fact that the manipulation of interest rates is a type of monetary policy that the creator of monetary policy uses in the economy to achieve the required outcome in the economy. Monetary policy and interest rates are macroeconomic principles that are generally focused on the general economy in the country. The Central or Supreme Bank of the country is an entity entrusted with the responsibility for promoting monetary policies in the country. The purpose of applying monetary policy and interest rates depends on the type of result that APEX is trying to achieve in the economy.

One of the objectives for the application of monetary policy and interest rate is to support the consumption of more services and goods to the consumer. This may be due to the consequences of a significant decline in the general level of consumption in the economy. Some of the effects include a reduction in aggregated gross domestic product (GDP) and an increne ensuring unemployment caused by the release of workers to the employer in compensation for reducing demand for their ZBIt gets out and services. If this is the case, the central bank will use monetary policy and interest rates to stimulate an increase in general consumer consumer consumption.

Reducing the level of interest rates by the central bank will lead to a reduction in interest charged to the borrowers for renting money from banks. This will also lead to a reduction in the standards needed to qualify for a loan or a loan line. As such, consumers will have access to the necessary resources that will allow them to make purchases such as buying houses, cars and other products, as well as services. This not only supports economic activity, but also leads to a reduction in unemployment rate, because manufacturers and manufacturers hire more employees to maintain a step in terms of demand.

If the central bank wants to slow down the economic activity in the economy, increase interest rates and increase consumer costs to obtain financing with which you can buy. It also causes banks tightening their requirements for loan and loan provision, which further makes it difficult for consumers to qualify for such funding for their consumption. Monetary policy and interest rates are therefore simply part of the tools used to control the economy.