Refer to the Figure Above

question 119

Multiple Choice

Refer to the figure above. If demand for overnight funds in the graph should increase by $50 billion at each and every point on the demand curve, but the Federal Reserve wants to keep the target rate at 5.0 percent, what will be the new equilibrium quantity of reserves?

• A) $100 billion
• B) $150 billion
• C) $200 billion
• D) $250 billion

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Definitions:

Rooting Reflex

An innate reflex in infants, which is a response to touching the cheek, causing the baby to turn their head toward the stimulus as if searching for food.

Voluntary

Refers to actions or operations performed by an individual's choice, free from external compulsion or coercion.

Conservation of Number

A cognitive developmental milestone reached by children, usually by age 7, where they understand that the quantity of an item remains the same despite changes in its shape or arrangement.

Adjacent

Situated near or next to something else, typically with the implication of being directly neighboring or touching.