Suppose That the Market for Reserves Is in Equilibrium and Then

question 22

Multiple Choice

Suppose that the market for reserves is in equilibrium and then the Federal Reserve decreases the quantity of reserves by $2 billion. The federal funds rate will ________ and the supply of loanable funds will ________.

• A) rise; increase
• B) rise; decrease
• C) fall; increase
• D) fall; decrease

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Definitions:

Employee Effectiveness

The degree to which an employee successfully fulfills the requirements and goals of their job role.

Power Base

The sources of power and authority an individual possesses, derived from various factors like expertise, position, or personal influence.

Power

The power or skill to guide or shape the actions of others or the direction of events.

Sergeant

A rank in the military and some police forces, typically just above corporal and below a lieutenant, responsible for a unit's discipline and training.