Everything Else Held Constant,in the Market for Reserves,when the Federal

question 17

Multiple Choice

Everything else held constant,in the market for reserves,when the federal funds rate is 1%,increasing the interest rate paid on excess reserves from 1% to 2%

• A)lowers the federal funds rate.
• B)raises the federal funds rate.
• C)has no effect on the federal funds rate.
• D)has an indeterminate effect on the federal funds rate.

---

Definitions:

After-Tax Distribution

The amount of money shareholders receive from a corporation's earnings after all applicable taxes have been deducted.

Before-Tax Distribution

Refers to the allocation of income among individuals or entities before accounting for taxes.

Personal Income Tax

a tax levied on individuals or households based on their total annual income, with the tax rate typically increasing as income increases.

Sales And Excise Taxes

Taxes imposed on the sale of goods and services (sales tax) and specific goods like gasoline, cigarettes, and alcohol (excise taxes), typically used to generate revenue for governments.