The traditional interest rate channel of monetary policy can be characterized by the following schematic: K-11-Yt. Match the names of the transmission mechanisms on the right with their schematic depictions on the left. N-E-NX1 Y1 -Pst Y1-11-vt - Ps 1+ wealth consumption → Yt - bank deposits ↑ bank loans 1-11-1 -Ps 1-adverse selection-moral hazard -it-Yt A. Wealth effects channel B. Balance sheet channel C. Bank lending channel i D. Exchange rate effect E. Tobin's q theory

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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The traditional interest rate channel of monetary policy can be characterized by the following schematic:
rd-/1-Y1.
Match the names of the transmission mechanisms on the right with their schematic depictions on the left
E-NX1Y1
[rd→Pst→Y→→¥1[
↓➡Ps 1 → wealth↑→ consumption - Y
f
- bank deposits † - bank loans 1-11-Y1
-Ps 1-adverse selection-moral hazard 1-11-1
A. Wealth effects channel.
B. Balance sheet channel
C. Bank lending channel
D. Exchange rate effect
E. Tobin's a theory
Transcribed Image Text:↑ The traditional interest rate channel of monetary policy can be characterized by the following schematic: rd-/1-Y1. Match the names of the transmission mechanisms on the right with their schematic depictions on the left E-NX1Y1 [rd→Pst→Y→→¥1[ ↓➡Ps 1 → wealth↑→ consumption - Y f - bank deposits † - bank loans 1-11-Y1 -Ps 1-adverse selection-moral hazard 1-11-1 A. Wealth effects channel. B. Balance sheet channel C. Bank lending channel D. Exchange rate effect E. Tobin's a theory
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