Transmission mechanism: Difference between revisions
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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. | 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. | ||
==See also== | |||
*[[Foreign exchange]] | |||
*[[Inflation]] | |||
Revision as of 12:32, 28 March 2016
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.
