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Author Question: The demand for money curve shows the relationship between the quantity of money demanded and A) ... (Read 132 times)

lindiwe

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on: Jun 30, 2018
The demand for money curve shows the relationship between the quantity of money demanded and
 
  A) real GDP.
  B) the inflation rate.
  C) the real interest rate.
  D) the price level.
  E) the nominal interest rate.

Question 2

How would the Fed's reduction of the reserve ratio requirement affect the money supply?
 
  What will be an ideal response?


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IRincones

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Reply #1 on: Jun 30, 2018
Answer to Question 1

E

Answer to Question 2

Since banks would rather loan out deposits than hold them as reserves, banks would respond to this policy change by loaning more, thereby increasing the money supply.


lindiwe

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Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

FergA

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Reply 3 on: Yesterday
Excellent

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