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Suppose That Households Decrease Their Demand for Checkable Deposits

question 67

Essay

Suppose that households decrease their demand for checkable deposits. If the Fed is using an interest rate as an intermediate target, will it have to take any action to maintain the target?


Definitions:

Physical

Relating to the body as opposed to the mind or emotions, or pertaining to material things rather than spiritual ones.

Cognitive

Relating to the mental processes of perception, memory, judgment, and reasoning.

Psychosocial

Pertaining to the influence of social factors on an individual's mind or behavior, and the interrelation of behavioral and social factors.

Heredity

The genetic transmission of physical or mental traits from one generation to the next.

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