Question

Using a supply and demand graph of the market for money, show the effects on the...

Using a supply and demand graph of the market for money, show the effects on the nominal interest rate if the Fed takes the following monetary policy actions:

a. The Fed lowers the discount rate and increases discount lending.

b. The Fed increases the reserve requirements for commercial banks.

c. The Fed conducts open market sales of government bonds to the public.

d. The Fed decreases the reserve requirements for commercial banks.

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