If the Fed Raised the Reserve Requirement, the Demand for Reserves

question 189

Multiple Choice

If the Fed raised the reserve requirement, the demand for reserves would

• A)increase, so the federal funds rate would fall.
• B)increase, so the federal funds rate would rise.
• C)decrease, so the federal funds rate would fall.
• D)decrease, so the federal funds rate would rise.

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Definitions:

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