Question
Ye = 500 +.9(Y-500) + 600 + 1000 Yf = $13,000 To get the economy to full employment, the Federal Open Market Committee decides to
Ye = 500 +.9(Y-500) + 600 + 1000
Yf = $13,000
To get the economy to full employment, the Federal Open Market Committee decides to conduct an open market operation.
Assume that for every 1% change in the interest rate, business investment chabges by $175. Assume that for every $100 in bonds that the FED buys/sells, the interest rate changes by 1%.
Should the FED buy or sell UST bonds?
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Economics Today The Macro View
Authors: Roger LeRoy Miller
19th Edition
0134478762, 978-0134478760
