February 20, 2017

Homework Help: Economics

Posted by Patrick on Saturday, November 3, 2007 at 1:57pm.

Suppose that a small open economy begins to use credit cards, starting from monetary equilibrium, allowing households to hold more of their wealth in interest bearing assets. Discuss the effect on real and nominal money supply, foreign-exchange reserves given:
A) Fixed exchange rates
B) Flexible exchange rates.


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