Question

1. How does monetary policy apply to peoples career and professional development?

2. How does monetary policy affects peoples investments?

Answer 1

1. Monetary policy seeks to determine the cash reserve ratios which banks keep in their accounts, the govenment bonds which it buys and it also helps to keep the inflation in check. Keeping inflation in check leads to growth and demand for goods and services, this leads to employment in the economy as banks avail credit from the national bank whose interest rate is determined by the monetary policy, the bank than redistributes the credit which it avails at an interest rate to businesses. Businesses take in the money and improve job prospects. Higher availability of credit and lower interest rates also leads to innovation and people opting for new businesses which leads to careers moving towards artificial intelligence and new technologies, this investment drives economic growth.

2. Monetary policy determines the rate of interest in the economy, people invest when they get cheap credit to invest in new businesses. Monetary policy also looks at the industry capacity utilisation and consumer confidence by conducting surveys. If the consumer confidence is high, meaning people believe that they think the economy is expected to grow, then businesses invest and gauge depending on the capacity utilisation, if it is very high. If the interest rates are low then people would invest in gold or other securities where they intend to get a higher rate of return.