The transmission channel that eventually affects the demand for Australian exports and imports by affecting their relative costs,and thus influences economic activity,is known as a:

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Quizplus · Accepted Answer

The foreign exchange channel refers to the transmission of monetary policy through the exchange rate, which affects the relative costs of exports and imports. A higher exchange rate makes imports cheaper and exports more expensive, which can lower demand for exports and boost demand for imports. This channel can influence economic activity, as it affects the competitiveness of Australian firms in international markets. The credit channel refers to the transmission of monetary policy through changes in the availability of credit, while the wealth channel refers to the impact of changes in asset prices on consumption and investment.

The Transmission Channel That Eventually Affects the Demand for Australian