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

Question

Quizplus · Accepted Answer

Short-term interest rate changes by central banks can have an impact on spending, but it is not the most powerful transmission mechanism. Other factors such as income, wealth, and expectations can also influence spending. Additionally, the effectiveness of interest rate changes may vary depending on the specific economic conditions and the responsiveness of households and businesses to interest rate changes.

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