Question

In the New Monetarist model, suppose that the central bank conducted a "quantitative easing" program by issuing outside money and exchanging it for privately produced liquid financial assets. What would the macroeconomic effects be? Does it matter if there is a liquidity trap where excess reserves are held in the financial system? If so, why, and if not, why not? Explain.



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  • CreatedDecember 05, 2014
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