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    Principles of Economics Study Set 8
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    Exam 34: The Influence of Monetary and Fiscal Policy on Aggregate Demand
  5. Question
    An Open-Market Purchase by the Federal Reserve Creates an Excess
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An Open-Market Purchase by the Federal Reserve Creates an Excess

Question 130

Question 130

Short Answer

An open-market purchase by the Federal Reserve creates an excess _____ of money. This causes interest rates to _____ and investment to _____. The change in investment causes aggregate demand to shift to the _____.

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supply, fa...

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