If the Demand for Reserves Remains Constant and the Market

question 19

Multiple Choice

 If the demand for reserves remains constant and the market federal funds rate is below the target rate, the Fed would: ?

• A) increase the IOER.?
• B) decrease the IOER.?
• C) do nothing; the Fed will let the market work.?
• D) increase the supply of reserves.

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Definitions:

Social Comparison Theory

The idea that individuals determine their own social and personal worth based on how they stack up against others they perceive as somehow faring better or worse.

Theory of Planned Behavior

A psychological theory that predicts an individual's intention to engage in a behavior at a specific time and place, considering attitudes, subjective norms, and perceived control.

Theory of Planned Behavior

A theory that predicts an individual's intention to engage in a behavior at a specific time and place, considering attitudes, subjective norms, and perceived control over the behavior.

Behavioral Intentions

An individual's stated likelihood or plan to perform a particular behavior, considered a predictor of actual behavior in various models of behavioral change.