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Exhibit 1 Value of Money MS1 MS2 1P 1/P2 MD Quantity of Money 13. Use Exhibit 1. If the money supply is MS1 and 1/P2 is the v

14. Use Exhibit 1. Suppose the Federal Reserve implements a monetary policy whereby the Fed purchase bonds. As a result, A. t

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Answer #1

13. C. x and z only

14. C

Money supply increases which leads to increase in price level and decrease in value of money.

15. E

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