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The European Central Bank (ECB) has a policy of inflation targeting, focused on 2% inflation. Assume it must intervene to restore the price level to
The European Central Bank (ECB) has a policy of inflation targeting, focused on 2% inflation. Assume it must intervene to restore the price level to its target rate. The ECB can conduct open market ____________ (purchases/sales), which ___ __________ (raises/lowers) the supply of bonds. As a result the money supply curve_____________ (moves left/moves right/is unchanged)
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