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Economics

describe (don't just mention) what happens to the federal funds rate, the borrowed monetary base (i.e. discount loans) and the non-borrowed monetary base (i.e. government securities) if the following happen:

(a) Commercial banks expect an unusually large increase in withdrawals from their checking accounts in the future.

(b) The Fed reduces the reserve requirement.

(c) The Fed reduces the reserve requirement, and sterilizes this by conducting an open market sale of securities at the same time.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M938520

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