The government decides to place limits on the interest rates banks can pay their depositors. Seeing that
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The government decides to place limits on the interest rates banks can pay their depositors. Seeing that alternative investments pay higher interest rates, depositors withdraw their funds from banks and place them in bonds. Will their action have an impact on the economy? If so how?
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If depositors withdraw their funds banks will be forced to shrink the size of their balance s...View the full answer
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Related Book For
Money Banking and Financial Markets
ISBN: 978-0078021749
4th edition
Authors: Stephen Cecchetti, Kermit Schoenholtz
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