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Unformatted text preview: money people want to hold. M d 1= 34,800 6% M d 2= 32,400 The money demand curve is downward sloping because at high interest rates people are willing to hold less money and keep their wealth in interest bearing assets. 2% b) 5% c) The Fed should sell bonds until M S = 32,400 32,400 34,800 Q of money...
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- Fall '09