Principles of Macroeconomics / Unit 12 MAC 1126 short lesson, about 20 seconds
The Transmission Chain
Captions available
The idea
Monetary policy reaches the economy along one chain: central bank action, then reserves or the rate on them, then the federal funds rate, then investment and durable consumption, then aggregate demand, then real GDP and the price level.
In practice
Every link is a place the chain can weaken.
Where people slip
Net exports belong in it too, through the exchange rate.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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