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5) Using the supply and demand analysis of the market for reserves, indicate what happens to the federal funds rate, borrowed reserves, and nonborrowed reserves,
5) Using the supply and demand analysis of the market for reserves, indicate what happens to the federal funds rate, borrowed reserves, and nonborrowed reserves, holding everything else constant, under the following situations. Include graphs. :1. The economy is surprisingly strong, leading to an increase in the amount of checkable deposits. 15. The Fed raises the target federal funds rate. 0. The Fed reduces reserve requirements
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