This macroeconomics assignment explores key concepts including money creation, the impact of reserve requirements, and the relationship between M1, M2, and M3 money supply measures. It delves into monetary policy, contrasting Keynesian perspectives on inflation and unemployment with modern monetary theories, and examines the Federal Reserve's tools, such as open market operations and discount rates. The assignment analyzes the loanable funds market, considering factors like business optimism and savings rates, and illustrates the effects of expansionary monetary policy on interest rates and output in the short run. It includes calculations on excess reserves and the money multiplier, offering a comprehensive overview of macroeconomic principles and their practical applications. The document provides answers to the questions in the assignment and provides appropriate figures and graphs to support the answers.
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