Principles of Macroeconomics Study Set 15
The Demand for Money Can Be Stated as M =
The demand for money can be stated as M = (P
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If the velocity of money is constant, then nominal GDP can change only if there is a change in the money supply.
When the Fed buys government bonds, bank reserves fall.
All other thing unchanged, when the Fed sells government bonds, it aims to shift the aggregate demand curve to the right.
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