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4 June, 01:03

In Exhibit 20-3, assume an equilibrium with an interest rate of 15 percent and the money supply at $100 billion. The Fed uses its policy tools to move the economy to a new equilibrium at E2 with money supply of $150 billion and an interest rate of 10 percent. This change could be the result of a (n) :

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  1. 4 June, 04:29
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    Answer Choices:

    A. price of bonds to rise.

    B. price of bonds to remain unchanged.

    C. price of bonds to fall.

    D. none of the above.

    Answer:

    A
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