The Quantity of Reserves Supplied Increases as Interest Rates Rise

question 33

Multiple Choice

The quantity of reserves supplied increases as interest rates rise because

• A)the Treasury borrows more at higher interest rates.
• B)consumers don't want to borrow as much so more money is left in banks.
• C)as interest rates rise, banks fear losses so they decrease lending.
• D)banks find it more profitable to loan out excess reserves to other banks.

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Definitions:

Existential Intelligence

A term from Howard Gardner's theory of multiple intelligences, highlighting an individual's capacity to tackle deep questions about human existence, such as the meaning of life, why we die, and how we got here.

Fluid Intelligence

The faculty to use rational thought and address challenges in new contexts without the help of learned material.

Crystallized Intelligence

The accumulation of knowledge, facts, and skills that one acquires through education and experience, which tends to increase with age.

Interpersonal Intelligence

The ability to understand and interact effectively with others, involving skills such as empathy, communication, and understanding social cues.