Macroeconomics

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Federal Reserve & Open Market Operations

If the Fed shifts to a more restrictive monetary policy, and it utilizes the open market operations tool, describe what will happen to each of the following:

1.  the reserves available to banks

2.  real interest rates

3.  household spending on consumer durables

4.  the exchange rate value of the dollar

5.  net exports

6.  the prices of stocks

7.  real GDPderal Reserve & Open Market Operations