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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This note was uploaded on 12/22/2011 for the course MACROECON 301 taught by Professor Christinanagy during the Fall '09 term at University of Washington.
- Fall '09