Explain the money multiplier and money creation process

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Reference no: EM1374424

[A] Explain how the Federal Reserve can affect the money supply and interest rates.
[B] Identify and describe the effects of a change in money supply on the interest rate.
[C] Explain the money multiplier and the money creation process.
[D] Explain the likely change in equilibrium output and price levels resulting from a change in interest rates.

Specifically, describe the different tools the Fed can use to change the money supply and interest rates, how interest rates and the money supply are related, and how changing interest rates will affect investment spending, equilibrium output, and prices. Also, could do a brief discussion of the money multiplier and how it relates to the Fed's activities

Reference no: EM1374424

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