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BECO011 Week 8 Practice quiz

Multiple fill-in-the-blank

Follow this link: http://www.rba.gov.au/education/resources/explainers/pdf/the-transmission-of-monetary-policy.pdf?v=2018-02-05-11-22-50 Links to an external site. and fill in to the blanks (Please write all answers in CAPITAL): The transmission mechanism explains how changes to the [Fill in the blank],   affect other [Fill in the blank], in the economy, and how changes to interest rates affect [Fill in the blank], and [Fill in the blank], The cash rate is the interest rate for [Fill in the blank], between [Fill in the blank], . It is important because it affects interest rates for [Fill in the blank], and [Fill in the blank], .

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The task presents a fill-in-the-blanks question about the transmission mechanism of monetary policy. Below, I walk through the blanks and explain why each chosen term fits in its respective spot, while also noting how alternative choices would alter the meaning. Blank 1: The transmission mechanism explains how changes to the cash rate, ... - The term that belongs here is CASH RATE. This is the central instrument whose adjustments (by the central bank) ripple through the economy via various channels. Replacing it with a different term would misidentify the policy tool at the heart of the transmission mechanism. Blank 2: ... affect other [VARIABLES], in the economy, and how cha......Login to view full explanation

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