What happens if central bank conducts open market purchase, Microeconomics

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What happens if central bank conducts open market purchase

Problem

1. When there is deficient financial liquidity, what happens if the central bank conducts an open market purchase?

2. What is the appropriate monetary policy response to a state of deficient financial liquidity?

3. How does a liquidity trap with interest-bearing reserves and an excess of reserves differ from a conventional liquidity trap?

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: What happens if central bank conducts open market purchase

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