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Scenario: The following figure shows the federal funds market. Assume that the market of reserves is ...

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Scenario: The following figure shows the federal funds market. Assume that the market of reserves is ...

Scenario: The following figure shows the federal funds market. Assume that the market of reserves is in equilibrium at point (R0, i0).

Refer to the scenario above. If the Fed undertakes an open market sale of bonds, ________.

▸ the reserves supply curve shifts from RS0 to RS1

▸ the reserves supply curve shifts from RS0 to RS2

▸ the reserves supply curve shifts from RS1 to RS2

▸ the reserves supply curve shifts from RS1 to RS0

Textbook

Macroeconomics

Edition: 3^rd

Authors: Acemoglu, Laibson, List

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