Explain why Canada gets by without a legal reserve requirement.
Answer to relevant QuestionsWhat is the potential money multiplier? Why is it called potential? What restrictions did the Glass-Steagall Act impose on the banking system? One way the Fed can increase the nation's money supply is by reducing the reserve requirement. Explain how this works. To illustrate, you can construct your own bank transactions and changes in the assets and liabilities of ..."The key to any economic stabilization is man aging aggregate demand." Keynesians and neo Keynesians would agree with that statement, even though they see quite different outcomes stemming from such management. Discuss. What are the most important spending items of the federal government? Of state and local governments?
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