Use the following figure for the federal funds market to answer the next question.
If the Fed supplies $300 billion in reserves, the equilibrium federal funds rate is ________.
A. 5.0%
B. 6.0%
C. 5.5%
D. Undeterminable with the information given.
Answer: A
You might also like to view...
All of the following household expenditures are included in consumption expenditure EXCEPT
A) payment to a dentist for filling a tooth. B) purchase of corporate stock. C) purchase of a new purse. D) purchase of hair styling.
The act of buying a product at a low price in one market and reselling the product at a higher price in another market is called arbitrage
Indicate whether the statement is true or false
A tariff, unlike a __________, provides revenues to the government.
Fill in the blank(s) with the appropriate word(s).
Figure 14-2
If the Fed anticipates that the conditions illustrated by AD2 and SRAS in will be present in the near future, it should
a.
decrease the discount rate.
b.
reduce reserve requirements.
c.
sell U.S. treasury bonds on the open market.
d.
buy U.S. treasury bonds on the open market.