Transmission mechanism: Difference between revisions
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The way in which a change in an economic variable has an effect on the economy. | 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. | 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. | 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 (GBP) increases. | ||
==See also== | |||
*[[Economics]] | |||
*[[Exchange rate]] | |||
*[[Foreign exchange]] | |||
*[[GBP]] | |||
*[[Inflation]] | |||
*[[Interest rate]] | |||
*[[Sterling]] | |||
[[Category:The_business_context]] | |||
[[Category:Financial_products_and_markets]] | |||
Latest revision as of 15:13, 29 December 2021
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 (GBP) increases.
