[musicluver]

Explain how each would affect money supply, money demand, interest rate

a) Fed buys bonds
b) increase in credit card availability reduces cash ppl hold
c) Fed reduces bank's reserve require'ts
d) Households decide to hold more money for holiday shopping
e) A wave of optimism boosts business investments/expands Aggregate Demand
f) an increase in oil prices shifts Short Run Aggregate Supply left

***((can you tell me if i'm doing this right?))
a) Fed buy bonds = incr money supply, int rate down, AD up
b) incr in money demand, int rate incr (so money demand will decr..), what happens to money supply??
c) decrease in reserve requirements lowers reserve ratio, raises money multiplier, and increases money supply. can loan out more of each dollar deposited. int rate down, AD up, money demand up
d)Households hold more money for holiday shopping: AD expands, SR money supply decr?, int rate up to get money in bank... what happens to money demand??
e) boost business investment/
e) boost business investment/ expand AD: so money demand up, int rate down..., money supply???
f) aggregate demand up? (oil necessary?) and because supply is less... ?

i'm really confused on b, d, e, f.