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Question 2 ECON EXERCISE NAME: This question refers to open market operations Assuming high cyclical unemployment will the Fed buy or sell bonds? Explain. 1.

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ECON EXERCISE NAME: This question refers to open market operations Assuming high cyclical unemployment will the Fed buy or sell bonds? Explain. 1. 2. Show appropriate entries in T account below for the Fed buying a bond from a bond dealer. FED Commercial Bank +Bond 1000 How do the results in question 2 differ regarding growth of the money supply, from the Fed buying a bond from a commercial bank? Explain

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