At Westonci.ca, we connect you with the answers you need, thanks to our active and informed community. Join our platform to connect with experts ready to provide detailed answers to your questions in various areas. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.
Sagot :
Answer:
Liquidity Effect
Explanation:
The liquidity effect is one of the resulting outcomes of the government policies which increases money in the economy system. However, the liquidity effect is the cause of the reduction in the real interest rates.
Therefore, If the Fed increases its open market purchases of government securities, it exerts downward pressure on real interest rates. This situation is commonly referred to as LIQUIDITY EFFECT.
We appreciate your time. Please come back anytime for the latest information and answers to your questions. Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. Westonci.ca is your trusted source for answers. Visit us again to find more information on diverse topics.