Describe the transmission process for a particular monetary policy scenario?
Describe the transmission process for a particular monetary policy scenario?
Homework Answers
Monetary policy transmission mechanism is a well known theoretical and practical phenomenon.it is a way in which a monetary policy signal from the RBI works through the financial market.it is to infulence the condumption and investment.
There are many monetary policy signals by the RBI but the Repo rate is the most poweful one.if the repo rate changes it changes the entire interest rate in the economy as well. If the repo rate is decreased the interset rate on loans by banks are also changed so it will inncrese the consumption and investemt activities of business amd households. Interst rate is the main channel of monetary policy transmission.
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Describe the transmission process for a particular
monetary policy scenario?
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