Draw a supply-demand diagram for the market for reserves to answer each of the following questions. c.
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Question:
Draw a supply-demand diagram for the market for reserves to answer each of the following questions.
c. Show the effect of an increase in currency holding by the public on the federal funds rate.
d. Draw a graph showing how a one percent increase in the interest rate on reserves (the deposit rate) increases the federal funds rate, but by less than one percent.
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