Multiple Choice
Scenario: The following figure shows the federal funds market. Assume that the market of reserves is in equilibrium at $500 billion in reserves and a 3 percent federal funds rate.
-Refer to the scenario above.If the Fed completes an open market sale of bonds that changes the quantity of reserves by $400 billion,then the federal funds rate will ________.
A) increase to 5 percent
B) decrease to 1 percent
C) remain at 3 percent
D) more information is needed to determine the new federal funds rate
Correct Answer:
Verified
Correct Answer:
Verified
Q142: Which of the following is true of
Q143: If consumers save the entire amount of
Q144: If the nominal interest rate falls,everything else
Q145: If the value of a government taxation
Q146: To _ the long-term real interest rate,the
Q148: Scenario: The following figure shows the federal
Q149: Explain the goal of a countercyclical fiscal
Q150: Which of the following is likely to
Q151: How did households use the tax rebates
Q152: If the expansionary effect of additional government