Question
34. Explain the four tools of monetary policy. Which one is the most important? 35. What are the characteristics of easy money policy and tight
34. Explain the four tools of monetary policy. Which one is the most important? 35. What are the characteristics of easy money policy and tight money policy? 36. What policies will the Fed use to counter inflation, or unemployment and recession? Describe the effects on bank reserves, the money supply, interest rates, investment spending, aggregate demand, and real GDP from each policy. 37. How will a change in the money supply and the resulting shift in the aggregate demand curve affect the real domestic output and the price level in (a) horizontal range, and (b) vertical range, along the aggregate supply curve?
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