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valputin valputin
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8 years ago
Targeting interest rates can be procyclical because
A) an increase in income increases interest rates, causing the Fed to buy bonds, increasing the monetary base and money supply, leading to further increases in income.
B) an increase in income increases the monetary base and money supply, causing the Fed to buy bonds to increase interest rates and income.
C) an increase in interest rates increases income, causing the Fed to buy bonds, increasing the monetary base and money supply, leading to further increases in income.
D) an increase in the monetary base increases the money supply, causing the Fed to buy bonds, increasing the monetary base and money supply, leading to further increases in income.
Textbook 
The Economics of Money, Banking and Financial Markets, Business School Edition

The Economics of Money, Banking and Financial Markets, Business School Edition


Edition: 4th
Author:
Read 160 times
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Our course uses > The Economics of Money, Banking and Financial Markets
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MeelaMeela
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8 years ago
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valputin Author
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8 years ago
Thank you
Our course uses > The Economics of Money, Banking and Financial Markets
wrote...
8 years ago
Slight Smile Good luck with the rest
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