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3. Assume the Fed wants to contract economic activity because it is concerned about inationary pressures. Explain what type of open market operations the Fed

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3. Assume the Fed wants to contract economic activity because it is concerned about inationary pressures. Explain what type of open market operations the Fed will initiate in order to accomplish this goal. If the mandated reserve ratio is 20%, and the Fed initially changes the money supply by $50 million as a result of its activities, what will be the total change in the money supply? Will the money supply be expanded or reduced

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