In the Market for Reserves,if the Federal Funds Rate Is

question 78

Multiple Choice

In the market for reserves,if the federal funds rate is between the discount rate and the interest rate paid on excess reserves,a decline in the reserve requirement ________ the ________ curve of reserves and causes the federal funds interest rate to fall,everything else held constant.

• A)decreases;demand
• B)increases;demand
• C)increases;supply
• D)decreases;supply

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