Question a if the federal reserve commits to money supply, Ask an Expert

Economics

Question: A) If the Federal Reserve commits to money supply growth of 2% per year, then the economy enters recession, it would be time consistent to raise the growth rate to 5%.

b) If households decide to hold more currency and pull money out of banks, this has no immediate effect on the money supply.

c) If households decide to hold more currency and pull money out of banks, this has an effect on the money supply over time.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M92586633

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