Multiple Choice
In the market for reserves,if the federal funds rate is between the discount rate and the interest rate paid on excess reserves,an increase in the reserve requirement ________ the ________ for reserves and causes the federal funds interest rate to rise,everything else held constant.
A) decreases;demand
B) increases;demand
C) increases;supply
D) decreases;supply
Correct Answer:
Verified
Correct Answer:
Verified
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