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Federal Banking FRQ

Explore the effects of the Federal Reserve altering the required reserve ratio on interest rates in the loanable funds market, as well as its impact on output, employment, price level, and the value of the US dollar relative to other currencies.

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Federal Banking FRQ

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  1. Federal Banking FRQ Assume that the economy is at macroeconomic equilibrium. The Federal Reserve changes the required reserve ratio from 10% to 12%. • Illustrate and analyze the effect of this change on interest rates in the loanable funds market. • Analyze the effect of this change on • Output • Employment • Price level • Value of the US dollar relative to other currencies

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