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 demand of reserves and causes the federal funds interest rate to ________,everything else held constant.
A) decreases;fall
B) increases;fall
C) increases;rise
D) decreases;rise
Correct Answer:
Verified
Correct Answer:
Verified
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