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Expressing the money supply equation Suppose the Fed decides it needs to pursue

Expressing the money supply equation

Suppose the Fed decides it needs to pursue an expansionary
policy Assume people hold no cash, the reserve requirement is 20%, and there
are no excess reserves

 

a Show how the Fed would increase the money supply by $2M
through changing the reserve requirement

 

b Show how the Fed would increase the money supply by $2M
through open market operations

Mar 16 2020 View more View Less

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