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Explain the liquidity effect and feedback effects

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Explain the liquidity effect and the feedback effects (income effect, price-level effect, and inflation effect) from an expansionary monetary policy. Use (a) graph(s) of the money market, along with graph(s) of the nominal interest rate over time to show and explain how nominal interest rates will behave over time. In doing so, you should explain and contrast the three cases discussed in class. How does the data for the U.S. demonstrate the immediate and longer term effects of the liquidity and feedback effects?

Reference no: EM131416065

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