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:

Standard Deviation

An evaluation of how spread out or dispersed a collection of data points is.

Normally Distributed

A data distribution pattern that follows the normal (bell curve) distribution.

Average Starting Salary

The mean initial compensation given to employees in a specific job or industry, often used as a benchmark for job seekers.

Standard Deviation

Standard deviation is a measure of the amount of variation or dispersion of a set of values, indicating how much individual values deviate from the mean.