CSUSM Holding of Money Lower the GDP of A Country Essay
- There is an increase in the C/CD ratio because people start to hold more currency.Will this lead to a change in GDP?Explain and diagrammatically represent your answer.
- The Fed wants to lower the federal funds rate, which is currently 3 percent, to somewhere in the range of 2.0 – 2.5 percent.Explain how the Fed goes about doing this today using the IOR and ON-RRP rates.In the process of explaining your answer, make sure to explain what banks and nonbank financial institutions will do in response to whatever it is that you have the Fed do.
