Are Visa and MasterCard part of M1? Why or why not?
Answer to relevant QuestionsCompare the classical and Keynesian views con cerning the demand for money. What is the potential money multiplier? Why is it called potential? Suppose the Federal Reserve raised the reserve requirement to 50 percent. Show how that would affect the value of money creation through the first 5 stages of deposit and loan in practice problem 1. How does a bank's borrowing reserves on the federal funds market differ from borrowing from the Fed? "To rational-expectations economists, it makes no difference whether we think in terms of the short run or the long run: Government cannot reduce the rate of unemployment, period." Explain.
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