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Canada (511,348)
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ECO102H1 (155)
Lecture

Lecture 31-Money, Banking, Monetary Policy (interest rates).docx

2 Pages
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Department
Economics
Course Code
ECO102H1
Professor
James Pesando

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Description
Money Banking Monetary Policy Interest Rates The Transmission MechanismMoney supply MS and Money Demand MD determine the interest rate Interest rate affects aggregate demand MS currencybank deposits is determined by o Central bank bank of Canada which determines bank reserves we will study nexto Commercial banks via multiple deposit creationWhat determines MDThe Demand for Money Intuition Households hold two assets o Money currencybank deposits pays no interesto Bonds pay interestExampleYou haveMoney 1000 Bonds10000 Would you increase or reduce money holdings ifThe interest
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