If the Demand for Reserves Is Fixed, the Smaller the Supply

question 7

Multiple Choice

If the demand for reserves is fixed, the smaller the supply of reserves provided through open market operation, the

• A)higher the fed funds rate.
• B)greater the rediscount rate.
• C)higher the government deficit.
• D)lower the fed funds rate.

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Definitions:

Tidal Volume

The amount of air moved into or out of the lungs during normal breathing.

Residual Volume

The amount of air remaining in the lungs after a forceful exhale, preventing lung collapse.

Vital Capacity

The maximum amount of air a person can expel from the lungs after a maximum inhalation, measuring lung health.

Vital Capacity

The maximum amount of air a person can expel from the lungs after a maximum inhalation, important in assessing respiratory health.