Essay
As the U.S. economy approached the millennium, January 1, 2000, many people cautiously began to hold larger than normal quantities of currency as protection against a possible disruption of banking services that could result from computer glitches.
a. How did this greater preference for currency affect the money supply?
b. What was the impact on output?
c. How could the Federal Reserve offset such an increase in currency preferences?
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a. The greater preference for currency i...View Answer
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