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A central bank that increases the money supply in its economy has more effect on spending the more interest rate responsive (elastic) is the money
A central bank that increases the money supply in its economy has more effect on spending the more interest rate responsive (elastic) is the money demand curve.
Advice from the teacher: Try drawing a graph that has and MS curve, and two MD curves (one that is more elastic than the other). Next, draw a shift in MS and see which MD curve is associated with a greater change in spending.
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