A general definition of the "transmission mechanism" is: the routes or channels that ripple effects created in the
A) market for goods and the services travel to affect the money market.
B) money market travel to affect the market for goods and services.
C) labor market travel to affect the market for goods and services.
D) market for goods and services travel to affect the labor market.
E) none of the above

Question

Quizplus · Accepted Answer

The transmission mechanism refers to how changes in one part of the economy (such as the money market) affect other parts of the economy (such as the market for goods and services). Therefore, the correct answer is B, as changes in the money market would affect the market for goods and services through the transmission mechanism.

A General Definition of the "Transmission Mechanism" Is: the Routes