Ceteris Paribus, If the Quantity Demanded of Reserves Exceeds the Quantity

question 47

Multiple Choice

Ceteris paribus, if the quantity demanded of reserves exceeds the quantity supplied of reserves, the Fed funds rates will

• A)decrease.
• B)remain the same.
• C)increase.
• D)decrease significantly.

---

Definitions:

Payoff Matrix

A table that shows the potential outcomes of different strategies in a game or decision-making situation for all involved players.

Dominant Strategies

In game theory, strategies that result in the best possible outcome for a player, regardless of the actions taken by other players.

Backward Induction

A method used in game theory and decision-making processes that involves reasoning backwards from the end of a problem or scenario to determine a sequence of optimal actions.

Extensive Form

A representation of a game that displays the sequences of choices available to players, including their possible strategies and outcomes.