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Aloiza [94]
2 years ago
15

When monetary authorities set interest rates, what happens to the money supply? Why is money supply important in monetary policy

?
Social Studies
1 answer:
brilliants [131]2 years ago
6 0

Answer:

Explanation:

A change in interest rates is one way to make that correspondence happen. A fall in interest rates increases the amount of money people wish to hold, while a rise in interest rates decreases that amount. A change in prices is another way to make the money supply equal the amount demanded.

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