6 In problem 4, when the Bank of Freezone has done its open market operation and the...
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6 In problem 4, when the Bank of Freezone has done its open market operation and the commercial banks have no excess reserves: a How has the supply of money changed? b What has happened to the interest rate? c What has happened to the quantity of money? Draw a figure to illustrate these changes in the Freezone money market.
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