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Controlling the monetary base through open market operations targeting a feds funds rate.

describe how the central bank in a modern economy operates; in particular, how it tries to control the monetary base (H), and thus the quantity of money (M) via open-market operations targeting a specific "fed-funds" rate. Illustrate what is the main difficulty in achieving the desired result (i.e. in predicting the ratio of M to H, the so-called "money multiplier")?

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M921910

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