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An Increase in the Quantity of Reserves Leads to

Question 70

Multiple Choice

An increase in the quantity of reserves leads to


A) an excess demand for reserves and a decrease in the federal funds rate.
B) a leftward shift of the demand curve for reserves and a lower federal funds rate.
C) a movement down along the demand curve for reserves to a lower federal funds rate.
D) an increase in the federal funds rate.

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