A change in monetary policy affects

Question

Quizplus · Accepted Answer

A change in monetary policy, such as altering interest rates, affects the cost of borrowing and lending, thus impacting investment. It also affects the availability of credit and the exchange rate, which together impact the value of net exports. Consumption expenditure is also affected due to changes in interest rates affecting borrowing costs and therefore consumer spending. However, government expenditures on goods and services are not directly affected by changes in monetary policy.

A Change in Monetary Policy Affects