Through the change in interest rates, the cost of funds necessary for the economic activities of firms and households will change, and this will stimulate overall economic activity. As a result, this will alter the economy's supply and demand balance of goods and services, and will in turn affect prices. Monetary policy is not enforced by legislation or through administrative discretion.
Rather, as I have explained, it is conducted through the central bank's banking operations, with private financial institutions as its counterparts. As we have seen so far, the various roles played by the central bank are conducted through its banking operations, and this is the very reason why they are undertaken by a bank instead of a government office. II.