1)How does Open Market Policy Work? How can the buying and selling of Bonds by the Fed increase or decrease the money supply?
2) How does changing the money supply have an impact on interest rates? Why does changing the interest rates have an impact on the economy?
Analyze how the money multiplier effect facilitates the creation of money
So would you say that "Money" is similar to other goods? That it has a supply and demand curve. So that when the supply is reduced, say by the Federal Reserve, the cost of money (the interest rate) goes up? What do you all think??
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