If the Fed Increases Reserve Requirements,the Demand for Reserves ________

question 93

Multiple Choice

If the Fed increases reserve requirements,the demand for reserves ________ and the equilibrium federal funds rate ________.

• A) increases; drops
• B) decreases; rises
• C) decreases; drops
• D) increases; rises

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Definitions:

Holder

An individual or entity that legally possesses a negotiable instrument, such as a check or a bond, and has the right to collect the value of the instrument.

Payable

Describes an amount of money that is owed and should be paid, often within a specified period.

Bearer

Refers to an individual or entity in possession of a negotiable instrument, such as a check or bond, that is payable to whoever holds it.

Payable

Due for payment; a financial obligation that one party has to pay to another.