In economics, this describes how a central bank's policy decisions (like changing interest rates) travel through financial markets to impact businesses and households. Key Channels of Impact
: Lower rates often boost the value of stocks and housing, increasing household wealth and spending power. transmission mechanism
: If people believe the central bank will keep inflation low, they may moderate their own price-setting and wage demands. 🦠 Disease Dynamics In economics, this describes how a central bank's
: Changes in policy rates affect the cost of borrowing for cars, homes, and business investments. and business investments.