When the Federal Reserve changes the real interest rate to affect the output gap and inflation rate,

Question:

When the Federal Reserve changes the real interest rate to affect the output gap and inflation rate, do each of the following monetary policy channels reinforce or partially offset the effect of the change in the real interest rate: the bank lending channel (as it operates through commercial banks), the bank lending channel (as it operates through shadow banks), and the balance sheet channel? Briefly explain.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...