Elucidate Illustrate what happens in a closed economy also in small open economy with diagrams.
Elucidate how every of the following developments would affect the supply of money, the demand for money also the interest rate. For every case, describe how Illustrate what happens in a closed economy also in a small open economy. Illustrate your answers with diagrams.
The Bank of Canada's bond traders buy bonds in open-marketplace operations.
1. An increase in credit card availability reduces the cash people hold.
2. Households decide to hold more money to use for holiday shopping.
3. A wave of optimism boots business investment also expands aggregate demand.
4. An increase in oil prices shifts the short-run aggregate supply curve to the left.