draw hypothetical curves for money demand and money supply; and analyze each of the following cases showing how interest rates and Money in circulation is affected. Draw graphs for each question separately. (a) National Income decreases. (b) The Federal Reserves decides to increase banks Reserve Requirements. (c) The Federal Reserves buys government securities through open market opera- tions.
Graph (a) When the national income decreases it means the value of production,investments and other activities relating to... View the full answer