What are the key principles underlying the monetary policy transmission mechanism?

The monetary policy transmission mechanism refers to how changes in monetary policy affect the economy, particularly through the influence of interest rates, credit availability, and asset prices. Several key principles underlie this mechanism.

Firstly, the interest rate channel is fundamental. When a central bank alters its policy rate, it directly impacts short-term interest rates, influencing borrowing costs for consumers and businesses. Lower interest rates __________ _______ ____ ____ _____ _________ _______ _____ _________ ___.
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