A policy transmission mechanism is:
A) a policy tool that is available to policymakers.
B) the chain of events through which a policy change affects the economy.
C) the government agency that is responsible for implementing a policy.
D) the mode of communication that is used by policymakers to convey their policy decisions.

Question

Quizplus · Accepted Answer

The policy transmission mechanism refers to the process or series of steps through which a policy change (such as a change in interest rates by the central bank) impacts the broader economy, including how it affects consumer behavior, investment, and overall economic activity.

A Policy Transmission Mechanism Is