Monetary policy plays an important role in affecting how many people have jobs. Here’s how it works:
Central Bank Actions: Central banks are groups that help manage the economy. They set interest rates, which can help encourage or slow down spending and investment.
Interest Rates: When interest rates go down (like to less than 0.5%), people and businesses usually spend more money. This can help create more jobs and lower unemployment. On the other hand, when interest rates go up, it can cause more people to lose their jobs.
Money Supply: The money supply is the amount of money that is available in the economy. If the money supply increases by 10%, we might see unemployment drop by about 0.5% over time.
In simple terms, smart monetary policy can help keep unemployment down or make it better.
Monetary policy plays an important role in affecting how many people have jobs. Here’s how it works:
Central Bank Actions: Central banks are groups that help manage the economy. They set interest rates, which can help encourage or slow down spending and investment.
Interest Rates: When interest rates go down (like to less than 0.5%), people and businesses usually spend more money. This can help create more jobs and lower unemployment. On the other hand, when interest rates go up, it can cause more people to lose their jobs.
Money Supply: The money supply is the amount of money that is available in the economy. If the money supply increases by 10%, we might see unemployment drop by about 0.5% over time.
In simple terms, smart monetary policy can help keep unemployment down or make it better.