Changes in Which of the Following Will Cause Changes in the Equilibrium

question 286

Multiple Choice

Changes in which of the following will cause changes in the equilibrium federal funds rate?

• A) the demand for excess reserves by banks
• B) the demand for required reserves by banks
• C) the supply of reserves created through past open market operations
• D) all of the above

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Definitions:

Captive Finance Company

A financial institution created by a company to provide loans and financial services exclusively to its customers.

Credit Extension

The act of providing a loan or increasing the credit limit available to a borrower, often by a financial institution.

Receivables Financing

A financial practice where a company uses its accounts receivable as collateral to secure funding.

Commercial Paper

Commercial paper is a short-term, unsecured promissory note issued by corporations, typically used for the financing of accounts receivable, inventories, and meeting short-term liabilities.