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
: Affects the willingness of banks to lend; higher rates can reduce a borrower's net worth, making them appear riskier to lenders. 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