Everything else held constant, in the market for reserves, when the federal funds rate is 5%, lowering the discount rate from 5% to 4%
A) lowers the federal funds rate.
B) raises the federal funds rate.
C) has no effect on the federal funds rate.
D) has an indeterminate effect on the federal funds rate.
A
You might also like to view...
The slope of the utility of wealth curve of a risk-averse person
A) increases as wealth increases. B) decreases as wealth increases. C) is constant. D) is negative.
Which of the following is likely to lead to a decrease in the demand for tennis balls?
A. An increase in the expected future price of tennis balls. B. An increase in the price of tennis racquets. C. An increase in the price of tennis balls. D. An increase in the price of the rubber used to make tennis balls.
Globalization is an ongoing process because:
A. the globalized AS/AD model will replace the standard AS/AD model, forever changing how economists view the economy. B. goods inflation has been solved as a problem for the economy, allowing the government to continue to run expansionary policies. C. government will continue to fail to implement policies that address the structural adjustments necessary to make U.S. firms more competitive. D. foreign countries, especially China and India, are moving up the value-added chain and competing with more and more goods.
Other things equal, if the required reserve ratio was lowered:
A. banks would have to reduce their lending. B. the actual reserves of banks would increase. C. the size of the monetary multiplier would increase. D. the Federal funds interest rate would rise.