Suppose the Federal Reserve ('the Fed') shifts to an expansionary monetary policy by buying bonds through open-market operations. Assume that this...
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Suppose the Federal Reserve ("the Fed") shifts to an expansionary monetary policy by buying bonds through

open-market operations. Assume that this policy is unanticipated. This problem will work through the short-run effects of this move.

The following graph shows the money demand and money supply curves. Show the effect of the Fed's expansionary monetary policy by shifting one or both of the curves, and ignore any potential feedback effects. As a result of the Fed's policy, the interest rate

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