When monetary policy works through changes in the real exchange rate,the effect is called

Question

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When monetary policy works through changes in the real exchange rate, the effect is called the exchange rate channel. This can occur when central banks manipulate the supply and demand of their currency in foreign exchange markets, leading to changes in the exchange rate. Changes in the exchange rate can affect the relative prices of imports and exports, impacting the balance of trade and aggregate demand in the economy.

When Monetary Policy Works Through Changes in the Real Exchange