Consider a situation where reserve requirements are binding and the Federal Reserve decides to reduce the requirements.

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Consider a situation where reserve requirements are binding and the Federal Reserve decides to reduce the requirements. How would the Open Market Trading Desk act to maintain the interest rate target, assuming the demand for excess reserves remains unchanged?

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Money Banking and Financial Markets

ISBN: 978-0078021749

4th edition

Authors: Stephen Cecchetti, Kermit Schoenholtz

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