When an economist states that the monetarist transmission mechanism is "direct" it means that a change in the money supply creates a direct impact on the goods and services market.

Question

Quizplus · Accepted Answer

The monetarist transmission mechanism suggests that changes in the money supply directly impact the economy through changes in interest rates and investment. This, in turn, affects the aggregate demand and supply in the goods and services market. Therefore, a change in the money supply creates a direct impact on the goods and services market.

When an Economist States That the Monetarist Transmission Mechanism Is