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Explain what is meant by transmission mechanism of monetary policy? What are the main mechanisms (channels) through which monetary policy is transmitted and how might they have changed with the financial crisis?

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Related questions

A.

Describe the various instruments of monetary policy and how they are used.

B.

Through what channels does monetary policy affect the economy? That is, what are the monetary policy transmission mechanisms? List first them, then clearly describe two of these channels.

How does monetary policy affect the economy? Explain the fundamentals behind why changes in the money supply have real effects on the economy and the monetary transmission mechanism. Explain how monetary policy can be used to effectively stabilize output and smooth business cycles. Evaluate the role of monetary policy and how it affects the macroeconomy given the implications of the financial accelerator.

Explain the fundamentals behind why changes in the money supply have real effects on the economy and the monetary transmission mechanism.

Explain how monetary policy can be used to effectively stabilize output and smooth business cycles.

Evaluate the role of monetary policy and how it affects the macroeconomy given the implications of the financial accelerator.

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