Big Bucks Bank currently holds $20 million in excess reserves. If the Fed increases the rate of interest it pays on reserves held at the Fed, we would expect Big Bucks Bank to:
A. use those excess reserves to increase its lending.
B. not change its lending activity, as excess reserves are not eligible to receive interest paid
on reserve accounts.
C. move a portion of those excess reserves into its required reserve account.
D. hold more of those excess reserves in its reserve account at the Fed, reducing the amount
it is willing to lend.
D. hold more of those excess reserves in its reserve account at the Fed, reducing the amount
it is willing to lend.
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Affirmative action programs serve three purposes. Which of the following is not one of those purposes?
A) Address current issues of discrimination. B) Enhance diversity in places where it is of particular value. C) Redress past wrongs. D) Guarantee employment regardless of qualifications.
The interest rate the Fed charges on loans to depository institutions is known as
A) the federal funds rate. B) the Fed loan rate. C) the discount rate. D) the interbank clearing rate.
The federal corporate income tax rate in 2003 was about _____ for most corporations
a. 28 percent b. 35 percent c. 42 percent d. 47 percent
The inflation rate has been constant for several years at 4 percent, and the unemployment rate has been stable at 6 percent over the same time period. Changes in government policy that cause the inflation rate to rise to 6 percent will
A) have no effect on the unemployment rate. B) cause the unemployment rate to fall in the short run. C) cause the unemployment rate to rise to 9 percent in the short run. D) cause the unemployment rate to rise in the short run, but we cannot tell by how much.