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10 cards from this deck
Process where monetary policy changes flow through economy
Interest rate, cash flow, exchange rate, wealth
Puts downward pressure on interest rates
Lower rates make borrowing cheaper, boosting spending
Lower loan repayments free up disposable income for spending
Lower rates depreciate currency, boosting export competitiveness
Lower rates raise asset prices, increasing wealth & spending
Rising asset values make people feel wealthier, boosting spending
12 to 24 months for full impact
Dampens spending, lowers demand, inflation & growth
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