In a Corridor System, If the Excess Demand for Reserves

question 52

Multiple Choice

In a corridor system, if the excess demand for reserves is zero when the overnight interest rate is lower than the central bank's target

• A)the central bank should borrow to achieve its target.
• B)the corridor system is not working.
• C)the central bank should impose a reserve requirement.
• D)the central bank should increase its deposit rate.
• E)the central bank should lend to achieve its target.

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Definitions:

Ethnomethodology

A sociological perspective focusing on the ways in which individuals understand, use, and produce the social order in daily interactions.

Macro-micro Order

The interaction and interrelation between larger societal structures and individual actions and experiences.

Ethnomethodologists

Researchers who study the routine methods and practices people use to construct a stable social world through everyday interactions.

Psychological Character Traits

Enduring qualities or characteristics that individuals possess, influencing their behaviors, attitudes, and how they interact with the world and others.