Question

Draw the Money Market before and after the Corona Virus Recession. Assume the Federal Reserve

Takes no action

Answer 1

ANSWER:-

☆ Draw the Money Market before and after the Corona Virus Recession. Assume the Federal ReserveTakes no action:

• Obviously Fed and all other budgetary organizations will expand cash flexibly in the market. Interest for cash is as of now down because of lockdowns. Individuals will spare additionally thinking about uncertain earnings in future. This will expand cash gracefully in future.
• Whenever Fed doesn't make any move at that point still cash request will be less and as interest for cash goes down, loan fees will tumble down from i1 to i2. Prior interest was moving right and loan fees were going up as request flexibly powers apply.

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