The Quantity of Reserves Demanded Decreases as the Federal Funds

question 12

Multiple Choice

The quantity of reserves demanded decreases as the federal funds rate rises because

• A)people want more liquid assets as the federal funds rate rises.
• B)the price of bonds rise as the federal funds rate rises.
• C)the opportunity cost of holding excess reserves increases as the federal funds rate rises.
• D)people want more money to invest as the federal funds rate rises.

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