The Interest-Rate Channel of Monetary Policy Transmission Appears to Be

question 22

Multiple Choice

The interest-rate channel of monetary policy transmission appears to be:

• A)Weak because the investment component of total spending isn't very sensitive to interest rates
• B)Weak because the investment component of total spending is very sensitive to interest rates
• C)Strong because the investment component of total spending isn't very sensitive to interest rates
• D)Strong because the investment component of total spending is very sensitive to interest rates

---

Definitions:

Payable

An accounting term for the amount of money a company owes to its creditors or suppliers for goods and services purchased on credit.

Debit Side

Refers to the left side of a general ledger account which is used to record increases in asset and expense accounts and decreases in liability, equity, and revenue accounts.

Credit Side

The right side of an accounting ledger where increases in liabilities, equity, and revenue, or the decrease in assets, are recorded.

T Account

A visual representation of a ledger account that displays both the debit and credit sides to track the balance of financial transactions.