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

question 120

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 supply of reserves causing the federal funds rate to ________,everything else held constant.

• A)decreases;decrease
• B)increases;decrease
• C)increases;increase
• D)decreases;increase

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Definitions:

Wealth Of Nations

Refers to "The Wealth of Nations," an influential book by Adam Smith that outlines the basics of free market economics.

Government Intervention

Government intervention refers to regulatory actions taken by a government to affect or influence the economy, market operations, or social welfare.

Improve Equality

Efforts or policies aimed at reducing disparities and achieving fairness and equal opportunity in society.

Market Economy

An economic system where decisions regarding investment, production, and distribution are driven by the market's supply and demand forces.