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7. Many workers hold large amounts of stock issued by
a. Use a supply-and-demand diagram to analyze this
the firms at which they work. Why do you suppose
policy. Does the interest rate rise or fall?
companies encourage this behavior? Why might a
b. What happens to investment? To private saving? To
person not want to hold stock in the company where
public saving? To national saving? Compare the
he works?
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size of the changes to the $20 billion of extra funds. (Hint: Expenditure on inventories is a type of