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please draw a graph Assume that when the central bank make a open market purchase of $100m, the money supply ultimately changes by $500m. Assume
please draw a graph
Assume that when the central bank make a open market purchase of $100m, the money supply ultimately changes by $500m. Assume also that banks hold 10% excess reserves and no cash holding. Draw a graph to show the effect on reserve market and federal funds rate. If the citizens decide to hold some (more) cash, what's the effect on money supplyStep by Step Solution
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