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What do you expect to see about the direction

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Question: If the demand for lending by financial institutions increases significantly due to booming economy and business activities. Under the same situation, if the Fed is not interested to intervene to support the increase in demand for lending by banks. What do you expect to see about the direction of short-term interest rate? Increase, decrease or stay the same? Explain briefly with the help of a relevant diagram of the federal funds market.

Reference no: EM133339813

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