The direct impact on spending of short-term interest rate changes by central banks is:

Question

Quizplus · Accepted Answer

While short-term interest rate changes by central banks can have an impact on spending, it is not necessarily the strongest transmission mechanism. Other factors such as consumer and investor confidence and the overall economic environment can also influence spending. Additionally, the impact may vary between consumption, investment, and net exports. Therefore, choice B is the most accurate.

The Direct Impact on Spending of Short-Term Interest Rate Changes