Suppose, at a given federal funds rate, there is an excess demand for reserves in the federal funds market
If the Fed wants the federal funds rate to stay at that level, then it should undertake an open market ________ of bonds, everything else held constant. If the Fed does nothing, however, the federal funds rate will ________. A) sale; increase
B) purchase; increase
C) sale; decrease
D) purchase; decrease
B
You might also like to view...
If two players engaged in a prisoner’s dilemma game are likely to repeat the game, they are more likely to cooperate than if they play the game only once.
a. True
b. False
Indicate whether the statement is true or false
The price of one currency in terms of another country's currency is known as the
A) nominal exchange rate. B) real exchange rate. C) relative inflation rate. D) purchasing power parity rate.
If the Fed sells securities worth $10 million to a commercial bank, the Fed's balance sheet will show
A) an increase in securities held of $10 million and an increase in bank reserves of $10 million. B) an increase in securities held of $10 million and a decrease in bank reserves of $10 million. C) a decrease in securities held of $10 million and an increase in bank reserves of $10 million. D) a decrease in securities held of $10 million and a decrease in bank reserves of $10 million.
The founding of the U.S. FDIC was primarily in response to
A) serious inflation after the Civil War. B) the bank panic of 1907. C) the Great Depression. D) the Volker recession in 1981-1982.