If the Fed shifts to a more restrictive monetary policy, and it utilizes the open market operations tool, describe what will happen to each of the following: the reserves available to banks real interest rates household spending on consumer durables

Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter14: Modern Macroeconomics And Monetary Policy
Section: Chapter Questions
Problem 7CQ
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Federal Reserve & Open Market Operations

If the Fed shifts to a more restrictive monetary policy, and it utilizes the open market operations tool, describe what will happen to each of the following:

  1. the reserves available to banks
  2. real interest rates
  3. household spending on consumer durables
  4. the exchange rate value of the dollar
  5. net exports
  6. the prices of stocks
  7. real GDP
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