Economics A-Level
Transmission mechanism
What Transmission mechanism means in Economics A-Level, as defined for AQA.
Definition of Transmission mechanism
Check what you remember
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Reference: AQA
The process by which altering the bank rate affects commercial interest rates, and through them consumption, investment, aggregate demand, the exchange rate and imported inflation.
Topics that use Transmission mechanism
- Central banks and monetary policy (AQA A-Level)
Related terms
- Aggregate demand
- Credit creation
- Economic governance
- Economic indicators
- Exchange rates
- Financial stability
- Hot money flows
- Inflation
Using Transmission mechanism in the exam
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