Business, 10.08.2021 01:30 aberiele1998
Assume that the MPC is 0.8 and the reserve requirement is 0.1. If the Federal Reserve needs to increase aggregate demand by $100 billion at each price level to move the economy back to full employment and the current interest rate is 7%, then the Federal Reserve should the money supply by .
a. buy, $4 billion.
b. sell, $4 billion.
c. buy, $2 billion.
d. sell, $2 billion.
Answers: 2
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Assume that the MPC is 0.8 and the reserve requirement is 0.1. If the Federal Reserve needs to incre...
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