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| Topic: |
Business
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| Number of pages / Number of words: |
6 / 1486 |
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In order to increase money supply to ward off recession and unemployment, the central bank can buy securities, lower reserve ratio, and lower discount rate (McConnell & Brue, 2004). These actions are called the easy money policy or expansionary monetary policy. By engaging in this type of monetary policy the bank loans will become less expensive more available, thus, increasing the aggregate demand, output and employment (McConnell & Brue, 2004)...
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When the central bank attempt to restrict money supply through selling bonds increasing the reserve ratio, and raising the discount rate, they are participating in the tight money policy or restrictive monetary policy. The tight money policy allows the Federal bank to reduce spending and control inflation (McConnell & Brue, 2004)...
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General points of the essay
Federal Reserve Bank Changing Money Supply
Federal Reserve and Money Supply
how does the federal reserve control the money supply?
lower management
Macroeconomic Impact Of The Federal Reserve Bank
Macroeconomics Impact on Business Operations
macroeconomics impact on business
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