What Is Channel Length? What Is the Most Important Determinant

question 110

Essay

What is channel length? What is the most important determinant of channel length? Mention two factors that shorten channel length.

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Definitions:

Net Capital Outflow

The difference between the domestic country's sale of assets to foreigners and its purchase of assets from foreigners during a specific period.

Loanable Funds

The market model representing the supply and demand for loans, where the interest rate is determined.

Demand

The desire of purchasers to buy a certain good or service, backed by the ability and willingness to pay a specific price.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing and the real yield to savers.