Assume banks install atm on every block and through making, Ask an Expert

Economics

Assume banks install ATM on every block and, through making cash readily available, decrease the value of money people want to hold.

[A] Suppose the Fed does not change the money supply. According to the theory of liquidity preference, what happens to the interest rate? What happens to aggregate demand?
[B] If the Fed wants to stabilize aggregate demand, how should it respond?

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9309528

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