The quantity of reserves supplied increases as interest rates rise because
A. the Treasury borrows more at higher interest rates.
B. consumers don’t want to borrow as much so more money is left in banks.
C. as interest rates rise, banks fear losses so they decrease lending.
D. banks find it more profitable to loan out excess reserves to other banks.
Answer: D
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The foreign exchange market is the market on which the ________ of various nations are traded for one another.
A. currencies B. goods and services C. international financial securities D. stocks and bonds
If the eyeglass industry is monopolistically competitive, then in the long-run: a. the price of eyeglasses will equal marginal revenue. b. the price of eyeglasses will exceed marginal cost. c. firms can earn economic profits
d. firms are price takers.
An increase in product price will cause:
A. quantity demanded to increase. B. the supply curve to shift to the left. C. quantity supplied to decrease. D. quantity demanded to decrease.
Related to the Economics in Practice on page 3: According to the Economics in Practice, due to the opportunity cost differential, one would expect ________ children at school when the rains have been plentiful in rural India, and ________ children at school when rural India is suffering from a drought.
A. fewer; more B. no; all C. the same number of; the same number of D. more; fewer