Transmission mechanism: Difference between revisions
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For example how a change in interest rates would affect rates of inflation or exchange rates. An increase in interest rates in the UK would lead to an appreciation of the domestic currency in the foreign exchange market as the demand for Sterling increases. | For example how a change in interest rates would affect rates of inflation or exchange rates. An increase in interest rates in the UK would lead to an appreciation of the domestic currency in the foreign exchange market as the demand for Sterling increases. | ||
Revision as of 14:45, 6 April 2013
Economics. The way in which a change in an economic variable has an effect on the economy.
For example how a change in interest rates would affect rates of inflation or exchange rates. An increase in interest rates in the UK would lead to an appreciation of the domestic currency in the foreign exchange market as the demand for Sterling increases.
