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How does the money supply change as a result of (a) an increase in the discount rate,?

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  • How does the money supply change as a result of (a) an increase in the discount rate,?


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Answer #1 | 23/12 2013 16:39
The banking system can borrow money from the FED more if the discount rate is low.Then it can create more fiat money by lending out because its reserves have increased.

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