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Identify an open market operation

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Reference no: EM131768852

Assume the Federal Reserve increases the money supply. 

  1. Identify an open market operation they might use to increase the money supply.
  2. Explain how an increase in the money supply will affect nominal and real interest rates.
  3. 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: EM131768852

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