Assume that the economys real GDP is growing

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Reference no: EM13838600

Assume that the economy's real GDP is growing

a. what will happen to money demand over time?

b. If the Fed leaves the money supply unchanged, what will happen to the interest rate over tiem?

c. If the Fed changes the money supply to match the change in money demand, what will happen to the interest rate over time?

d. What would be the effect of the policy described in part (c) on the economy's stability over the business cycle?

Reference no: EM13838600

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