How does Monetary Policy affect the economy of a country?

After having discussed the objectives and tools of monetary policy, let us now talk about how policy affects the economy:
Consumption, Saving and Investment:Changes in the real interest rates affect the demand for consumption and savings of the people and also change the investment pattern of the businesses.
For instance, a reduction in real interest rate lowers the cost of borrowing, encouraging people to borrow in order to consume (durable items like, electronic items, automobiles etc.). Moreover stimulating bank’s willingness to lend more and investors to invest more, on the other side discourage saving, resulting to increase spending and aggregate demand.
Lower real interest rates also make stocks and other such investments more desirable than bonds, resulting stock prices to rise. People are likely to increase their stock of wealth.
Foreign Exchange, Imports and Exports:Short-run changes lower interest rate result as currency depreciation, which means lower prices of home-produced goods selling abroad, making exports dearer and discourage imports, reducing the gap between imports and exports and having favorable balance of trade. Again this leads to higher aggregate spending on goods and services produced in the country.
Output and Employment:The increase in aggregate demand for the output boosts up the production cycle; generating employment, as a result increase investment spending on the existing industrial capacity. Which accelerate the consumption further due to more incomes earned, thus attaining the multiplier effect of Keynes.