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An increase in the money supply decreases the interest rate in the short run.
An increase in the money supply decreases the interest rate in the short run.
An increase in interest rates implies a higher opportunity cost of holding money.
An increase in interest rates implies a higher opportunity cost of holding money.
If the Fed buys bonds in the open market, the money supply decreases.
If the Fed buys bonds in the open market, the money supply decreases.
The money multiplier equals 1/(1 - R), where R represents the reserve ratio.
The money multiplier equals 1/(1 - R), where R represents the reserve ratio.
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Monetary policy becomes ineffective as interest rate reaches zero.
Monetary policy becomes ineffective as interest rate reaches zero.
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