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

question 122

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 supply of reserves and causes the federal funds interest rate to ________,everything else held constant.

• A)decreases;fall
• B)increases;fall
• C)increases;rise
• D)decreases;rise

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Definitions:

Lens

An optical device capable of converging or diverging light, or a transparent structure in the eye which focuses light onto the retina to facilitate vision.

Chemoreceptor

Sensory receptor that is sensitive to chemical stimulation—for example, receptors for taste and smell.

Thermoreceptor

Sensory receptor that detects heat.

Mechanoreceptor

Sensory receptor that responds to mechanical stimuli, such as pressure, sound waves, or gravity.