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  • Essay / The impact of the central bank and the economy in the long term...

    2. The Central Bank cannot be solely responsible for stabilizing the economy. Who else is responsible and what role do they play? The central bank does not control the economy; there are others that have an effect on the economy. These include government, stock markets, commercial and retail banks, corporations and the EU. Government Alongside the central bank, the next key player in shaping the economy is the government. The government influences the economy in everything it does. The main objectives of a government for an economy are: • Economic growth and • Economic stability Employment The government employs millions of people. For example, the UK government employs workers in the NHS, police, civil servants, HM Treasury and Customs, Border Patrol, etc. If the British government decided to cut its workforce by 50%, the UK would face mass unemployment and there would be millions of people. possibly on job seekers, while looking for a new job. However, if the government decided to increase its workforce by 50%, it might end unemployment, but there would also be a surplus of jobs, workers' wages would rise, and so would prices of goods. goods and taxes; because there are too many jobs and businesses would be desperate to find work. The government employs as many people as it can afford while having the best impact on the economy in terms of employment levels and aggregate demand (total demand for goods and services in the economy). The government can also influence corporate employment by offering programs and bonuses. For example, the apprenticeship program aims to increase youth employment in companies, which is made more attractive to companies by a lower minimum wage, and in exchange, apprentices acquire a qualified diploma..... ...in response, Kenyan policymakers introduced a number of supply- and demand-driven policies. Among many others are demand-side import access, supply-side subsidies for fertilizers and seeds, supply-side export ban on Maze. These supply and demand side policies were designed to stabilize the economy, for example by banning exports on Maze, demand decreased, meaning the price to pay for the population of Kenya also increased. Conclusion We can see that long-term economic growth is fundamental to the economy and the future of the economy is bleak without it. LREG improves a country's standard of living, as shown by the example of Kenya where supply-side policies have enabled better access to food. It can also lead to increased spending and higher GDP, for example by increasing employment rates by providing capital to businesses. rent and buy new technologies.