ECON 102 Lecture Notes - Lecture 18: Regulation Q, Liquidity Preference, Opportunity Cost

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21 Mar 2017
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ECON 102 Full Course Notes
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Vi: the fed and the money supply. The rates are: the federal funds rate, the discount rate, required reserve ratio, the required reserve ratio is not used as a tool of monetary policy recently. In neither case did we mention the fed at all! Currency held as an asset by the fed is not in. Banks are now able to create more loans (and profit) Money: from nominal to real: open market operations are the fed"s main tool of monetary policy, there is something very puzzling in all this major theme of first chapters: real variables. A definition; an identity: now, assume that v is a parameter: it"s fixed (at ), and, suppose sticky prices: prices are stuck (at ), as m , q . Money effects output: our second explanation of why money matters builds a model of the market for the good called money .

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