Everything Else Remaining Unchanged,if the Demand Curve for Reserves Shifts

question 74

Multiple Choice

Everything else remaining unchanged,if the demand curve for reserves shifts to the right and the value of borrowed reserves is zero,________.

• A) there will be an increase in both the federal funds rate and the quantity of reserves
• B) there will be a decrease in both the federal funds rate and the quantity of reserves
• C) there will be a decrease in the federal funds rate but no change in the quantity of reserves
• D) there will be an increase in the federal funds rate but no change in the quantity of reserves

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Definitions:

Cupcakes

Small cakes designed for a single person, often decorated with frosting and other sweet toppings.

Glasses of Milk

Units of measurement for milk, commonly consumed for its nutritional value, including calcium and vitamins.

Giffen Good

A product that experiences an increase in demand as its price rises, contrary to the basic law of demand, often because it lacks close substitutes.

Normal Goods

Goods for which demand increases when consumers' income increases and falls when income decreases, all else being equal.