Take a look at the two panels of Figure 16-2, and also consider Figure 16-1. Suppose that

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Take a look at the two panels of Figure 16-2, and also consider Figure 16-1. Suppose that instructions in the latest FOMC Directive call for a monetary policy action aimed at inducing individuals and businesses to demand a smaller quantity of money. Use the appropriate panel of Figure 16-2 to assist in explaining whether officials at the Federal Reserve Bank of New York's Trading Desk should buy or sell bonds.
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