Results (
English) 1:
[Copy]Copied!
The Central Bank uses a number of tools that shape monetary policy. Open market operations directly affect the money supply through the purchase of short-term government bonds (to expand the supply of money) or sell them (to contract). The benchmark interest rate, such as LIBOR and the Fed funds rate, which affects the demand for money by lifting or lowering the cost of borrowing-in essence, the price of money. When the loan is cheap, the company will take more debt to investment in hiring and expansion; consumers will make large purchases, with cheap credit; and protection will have more incentive to invest their money in stocks or other assets, rather than earn very little — and could probably lose money in real terms-through the savings account. Policy makers also risk management in the banking system by mandating the reserves banks must keep on hand. Higher reserve requirements put a damper on lending and curb inflation
Being translated, please wait..
