A fellow student in your economics class stops you in the hallway and says: An increase in
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A fellow student in your economics class stops you in the hallway and says: “An increase in the demand for money causes the interest rate to rise. But a rise in the interest rate causes people to demand less money. Therefore, increases in money demand largely cancel themselves out, and have very little effect on the interest rate.” Is this correct? Why or why not?
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Related Book For
Macroeconomics Principles and Applications
ISBN: 978-1111822354
6th edition
Authors: Robert E. Hall, Marc Lieberman
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