Question: When interest rate is increased, there is an increase in income from interest on savings deposits which makes people spend more. This channel of monetary

When interest rate is increased, there is an increase in income from interest on savings deposits which makes people spend more. This channel of monetary policy transmission is called:

Asset price channel

Savings

-

investment channel.

Wealth Channel

Cash flow channel.

When interest rate is increased, there is an increase in income

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Question Type: MCQ Question No . 7 . Mark / s: 1 . 0 0 | Negative Mark / s: 0 . 0 0 When interest rate is increased, there is an increase in income from interest on savings deposits which makes...

122 Consider a firm with a production function given by q=187N, where q is the quantity produced and N is the number of workers hired. The firm sells its product in a competitive market, and the...

Problem 01. 2. Phillips Curve with bargaining power's impact on labor productivity. The labor market model and the consequent Phillips Curve that we developed in the lectures assumed constant labor...

Which of the following is a contractual savings institution? a life insurance company a credit union a savings and loan association a mutual fund Economists group commercial banks, savings and loan...

CHAPTER 6 : PRODUCTION AND GROWTH 2. Suppose that society decided to reduce consumption and increase investment. A) How would this change affect economic growth ? B) What groups in society would...

1. As the price level increases, the demand for money ________and interest rates __________. 2. If output is above full employment, we expect wages and prices to rise, money demand to increase, and...

Refer to the following graph: If the government elects to decrease spending, which AD curve will give the final equilibrium level of income? A B C D How would the Fed pursue contractionary monetary...

Introduction With the Winter Gear Distributors case, you experienced the value of integrating all of the stand-alone information systems within a company into one comprehensive system. As we saw,...

In 2008 and 2009, the US economy and many others around the world experienced a financial crisis and a severe downturn in economic activty. In many ways, it was the worst macroeconomic event in more...

From a management perspective, formulate and explain your company's offensive or defensive strategy to improve its market position in the next 3 years. Explain whether your company will be a first...

Question 1 A residential client hired a general contractor (GC) to construct a major $3 million executive home. The client contracted separately with a reputable architect for the design. After the...

It takes 45.66 mL of 0.1126 M HBr to titrate 25.00 mL of Ca(OH)2 to its equivalence point. What is the original concentration of the Ca(OH)2 solution?

How many of each type of scooter must Stewart'sStewart's Scooters sell each month to break even? Start by selecting the formula and entering the amounts to compute the breakeven point in units for...

Scenario: A Multi-national Corporation called The Globe has created a subsidiary called Thirst in an under-developed country called non-potable waters. This hosting country suffers from a severe...

b. Explain how you initially felt about the communication.

1. Identify four early foci in the development of intercultural communication.

e. Based on this experience, identify some characteristics that may be important for successful intercultural communication.