The three main transmission mechanisms through which the economy is been affected as a result of yeild curve are:
Corporate impact
global impact
consumer impact
- The yield curve can be regarded as graph which shows how the yield that comes from debt instruments vary with respect to their years remaining to maturity. This debt instrument could be bond.
- The monetary transmission mechanism can be regarded as the process whereby asset prices as well as general economic conditions are been affected due to monetary policy decisions
The transmission that affect the economy are
- Corporate impact
- global impact
- consumer impact
- All these transmission all have effect on the aggregate demand as well as interest rates, and amounts of money in the economy
Therefore, transmission mechanisms have serious effect on the economy.
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