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Figure: Short-Run Determination of the Interest Rate
-(Figure: Short-Run Determination of the Interest Rate) Refer to Figure: Short-Run Determination of the Interest Rate. If the money supply is at MS2 and the Fed conducts contractionary monetary policy, in the short run the interest rate increases to r1. In the long run prices will _____ thereby _________ the demand for money.
Shares
Shares represent the portion of ownership in a company or an investment that entitles the holder to a proportional claim on profits, which may be paid out as dividends if declared.
Unissued Stock
Shares that a company is authorized to issue according to its corporate charter but has not yet issued to shareholders.
Outstanding Bonds
Bonds issued by an entity that are currently not redeemed and are in the hands of investors, indicating debt that still needs to be paid off.
Allocation
The process of distributing resources or assigning tasks among various projects, units, or individuals.
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