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Draw a supply and demand curve for US government bonds. Show equilibrium. Show and explain what the effect expansionary monetary policy, using open market operations,
- Draw a supply and demand curve for US government bonds. Show equilibrium.
- Show and explain what the effect expansionary monetary policy, using open market operations, will have on this equilibrium.
- Show and explain what the effect of contractionary monetary policy, using open market operations, will have on this equilibrium.
- Explain what the Fed should do if the actual interest rate is below its target rate?Or above?
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