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Executing Expansionary Monetary Policy

Relationship between money supply and interest rates

Relationship between money supply and interest rates

As money supply increases, the interest rate decreases, as depicted in the graph above.

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    https://figures.boundless.com/332/large/money-supply.jpeg Boundless Learning CC BY-SA 3.0.

Related Terms

  • reserve requirement
  • open market operations
  • fed funds rate
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