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

question 79

Multiple Choice

In the market for reserves,if the federal funds rate is above the interest rate paid on excess reserves,an open market sale ________ the ________ of reserves,causing the federal funds rate to increase,everything else held constant.


Definitions:

Marginal Benefit

The added value or utility one experiences by consuming one more unit of a good or service.

Marginal Social Benefit

The extra advantage to the community from creating or using an additional unit of a product or service.

Marginal Social Cost

The total cost society bears for the production of an additional unit of a good or service, including private and external costs.

Tradable Permits

Tradable permits are environmental policy instruments that allow companies or entities to buy or sell allowances to emit a certain amount of pollutants, aiming to reduce overall emissions efficiently.

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