Suppose you take $50 from your wallet and you deposit it into your checking
account. As a result:
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currency in circulation decreases
Simple Deposit Multiplier
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1/RR
The Loanable Funds Framework
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Determines Equilibrium Bond Prices
All things equal, if the Federal reserve increases the money supply, the supply curve
for money shifts __________ and causes an ___________ in interest rates.
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right, decrease
Supply for Bonds and Changes in Supply
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Borrowers and Spenders
Changes:
1. Wealth
2. Real Interest Rate Decreases
3. Government Deficit Spending
Monetary Base
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MB = C + R
account. As a result:
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currency in circulation decreases
Simple Deposit Multiplier
Give this one a try later!
1/RR
The Loanable Funds Framework
, Give this one a try later!
Determines Equilibrium Bond Prices
All things equal, if the Federal reserve increases the money supply, the supply curve
for money shifts __________ and causes an ___________ in interest rates.
Give this one a try later!
right, decrease
Supply for Bonds and Changes in Supply
Give this one a try later!
Borrowers and Spenders
Changes:
1. Wealth
2. Real Interest Rate Decreases
3. Government Deficit Spending
Monetary Base
Give this one a try later!
MB = C + R
