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Determinants of aggregate demand

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Reference no: EM132559850

Assume the Federal Reserve increases the money supply.

  • Identify an open market operation they might use to increase the money supply.
  • Explain how an increase in the money supply will affect nominal and real interest rates.
  • Explain how the change in interest rates caused by an increase in the money supply will impact each of the determinants of aggregate demand (C, I, G, Xn).

Reference no: EM132559850

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