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Hey Everyone! I'm Mr. Willis, and You Will Love Economics!
In this video, I will:
- Discuss the appropriate monetary policy needed to return the economy to equilibrium
when a recessionary or an inflationary gap exists
- Explain how the Federal Reserve's monetary policies will impact the supply of money
in the money market
- Analyze how those changes in the money supply will impact the nominal interest rate
- Evaluate how a change in the nominal interest rate will affect investment demand by firms
- Discuss how changes to investment spending by firms due to changes in nominal interest
rates will lead to changes in real GDP
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