a. Explain the difference between portfolio and transactions theories of money demand. b. The central bank of a country directly influences the components of money supply through 100-percent-reserve-banking or fractional reserve banking. By distinguishing between these two methods, explain how the central bank directly influences the components of money supply

Essentials of Economics (MindTap Course List)
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ISBN:9781337091992
Author:N. Gregory Mankiw
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Chapter21: The Monetary System
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a. Explain the difference between portfolio and transactions theories of money demand.
b. The central bank of a country directly influences the components of money supply through 100-percent-reserve-banking or fractional reserve banking. By distinguishing between these two methods, explain how the central bank directly influences the components of money supply

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