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Question: If the Fed were to pursue an easy-money policy (lower interest rates) why would we expect this to stimulate investment demand? Are there limits to the power of an "easy money" policy; are we in a period now when additional monetary ease might now result in increases in investment spending? Same question regarding a "tight-money" policy. What has this relationship to do with the present-value formula?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M93129661

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