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Unformatted text preview: Bond Market Equilibrium Interest Rates Market for Money: LPF Equilibrium Interest Rates in LPF We get a ﬁrst idea of how monetary policy works. An increase in the money supply engineered by the Federal
Reserve will shift the supply curve for money to the right Assume that the supply of money is controlled by the central
bank Shifts in the Supply of Money Asset Demand ...
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