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anthonydel117 anthonydel117
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Posts: 449
3 years ago
Changes in a central bank's repo rate cannot be used to control the money supply with great precision because

▸ there is a maximum amount of money that banks are permitted to borrow from the central bank in any one year.

▸ a change in the repo rate will not affect a bank until two weeks after the change is implemented.

▸ its effects on banks' demand for reserves are uncertain.

▸ only banks that are members of the central bank network can borrow from the central bank, and most banks are not members of such networks.
Textbook 
Essential Economics for Business

Essential Economics for Business


Edition: 5th
Authors:
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gumpfablegumpfable
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Posts: 366
3 years ago
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