One Outcome That Would Result If the Fed Paid Interest

question 16

Multiple Choice

One outcome that would result if the Fed paid interest on reserves would be:

• A)banks would hold less excess reserves.
• B)the federal government's deficit would be larger (or surplus smaller).
• C)banks would no longer hold excess reserves.
• D)the target federal funds rate would have to be fixed at a constant rate.

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Definitions:

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Ritualistic Acts

Behaviors performed in a prescribed manner, often with symbolic significance, common in religious, cultural, and social practices.

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A caregiver who provides medical and personal care services to individuals at their residence.