In the Market for Reserves,if the Federal Funds Rate Is

question 103

Multiple Choice

In the market for reserves,if the federal funds rate is above the interest rate paid on excess reserves,an open market purchase ________ the ________ of reserves which causes the federal funds rate to fall,everything else held constant.

• A)increases;supply
• B)increases;demand
• C)decreases;supply
• D)decreases;demand

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Definitions:

Average Tax Rate

The percentage of total income that is paid in taxes.

Marginal Tax Rate

The percentage of tax applied to your next dollar of income, indicating the rate at which your last dollar earned is taxed.

Local Property Tax

Local Property Tax is a levy on the value of a property, typically imposed by local government authorities to fund public services.

Payroll Tax

Taxes imposed on employers and employees, typically calculated as a percentage of the salaries that employers pay their staff.