The Quantity of Reserves Demanded Decreases as the Federal Funds

question 12

Multiple Choice

The quantity of reserves demanded decreases as the federal funds rate rises because

• A)people want more liquid assets as the federal funds rate rises.
• B)the price of bonds rise as the federal funds rate rises.
• C)the opportunity cost of holding excess reserves increases as the federal funds rate rises.
• D)people want more money to invest as the federal funds rate rises.

---

Definitions:

Group

A number of individuals who come together or are classified together based on shared characteristics or for a common purpose.

Cognitive Models

Theoretical constructs that explain and predict thinking patterns, decision making, and problem solving in humans.

Changing Thinking

The process of modifying one's thought patterns, often towards more positive or constructive outcomes.

Removing Symptoms

A treatment approach aiming to alleviate or eliminate the physical manifestations of a condition without necessarily addressing the underlying cause.