Course: ECO 110

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Unit 9 Assignment »

Unit 9 Assignment

Unit 9 Assignment
Unit 9 Assignment

Draw a graph showing the demand and supply of money.

Use the graph to show what happens in the following cases:

1. There is an increase in future expectations of higher incomes and  the desire of consumers to purchase more goods increases.
2. The federal reserve is concerned about a recessionary gap, purchases bonds from banks, and increases the money supply.
3. If there is an increase in the money supply by the FED, explain the effect on interest rates, consumer buying and investment by firms.