Discuss what will happen to the monetary base and the money supply if the central bank starts

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Discuss what will happen to the monetary base and the money supply if the central bank starts paying interest, say at the Treasury bill rate, on commercial bank deposits with it. If it does so, would the interest elasticity of money supply be higher or lower than it would be under a regime where interest was not paid on such deposits?

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Monetary Economics

ISBN: 9780415772099

2nd Edition

Authors: Jagdish Handa

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