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As interest rates increase, people economize on their holdings of currency relative to other types of bank deposits, and banks economize on their holdings of reserves relative to deposits.
a. Using the monetary base-money multiplier framework, explain how the money supply changes as interest rates increase.
b. Graphically illustrate money supply and money demand when the nominal interest rate is on the vertical axis and the quantity of money is on the horizontal axis.
Trabeculae Carneae
Irregular muscular columns that line the interior walls of the ventricles of the heart.
Pectinate Muscles
Internal ridges of myocardium in the atria of the heart.
Visceral Pericardium
The inner layer of the pericardium that closely envelopes the heart.
Epicardium
The outermost layer of the heart wall, also known as visceral pericardium, which provides lubrication and protection to the heart.
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