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Three Control Mechanisms of the Federal Reserve

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Why would the Federal Reserve want to control the size of the money supply?

Compare active and passive approaches to the economic policy. Which approach would seek to shrink the size of the government?

What determines the quantity demanded of money?

What three control mechanisms does the Federal Reserve have at its disposal to determine the size of the money supply?

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Solution Summary

Both active and passive approaches to the economic policy are reiterated.

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Jayant Kumar, MBA
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  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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