Need help with a, b, and c.
During the 1990s, American depositors dramatically increased the share of their funds in money market mutual fund accounts. Although these accounts have restrictions (such as limited access to funds and minimum deposit requirements), they offer depositors higher interest rates versus standard checking. The widespread use of financial instruments during the 1990s led to a decrease in money demand because people held a smaller share of their deposits in checkable accounts (demand deposits).
a. How would this shock affect the U. S. output, interest rate, exchange rate, consumption, investment, and trade balance?
b. How would your answer to (a) change if the Fed used monetary policy to stabilize output?
c. How would your answer to (a) change if the Fed used monetary policy to maintain a fixed exchange rate?
Recently Asked Questions
- Please refer to the attachment to answer this question. This question was created from Finc 3331 - Fall 2017 - Test 1 - final (2).docx. Additional comments:
- How can a marketer use the Knot to better reach its target market?
- Calculate the ratio of bicarbonate to carbonic acid at ph 7.4 using pka values for carbonic acid - 3.83 and bicarbonate- 10.25. What is unusual about these