Describe what happens to the money supply

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Suppose that foreigners start holding more U.S. currency. For a given interest rate, Americans don't change their holdings of either currency or checking deposits .Assume the Fed keeps the monetary base constant. Describe what happens to

(a) the money supply,

(b) the money-demand curve, and

(c) the equilibrium interest rate. Explain your answers.

Reference no: EM131221556

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