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-The Figure Above Shows the Market for Bank Reserves in Futureland.If

Question 147

Multiple Choice

-The figure above shows the market for bank reserves in Futureland.If the Bank of Futureland undertakes an open market purchase of government securities that changes the quantity of reserves by $25 billion, then the federal funds rate will ________. A) rise to 8 percent a year B) remain at 6 percent a year C) fall to 4 percent a year D) change but more information is needed to determine by how much E) None of the above answers is correct.
-The figure above shows the market for bank reserves in Futureland.If the Bank of Futureland undertakes an open market purchase of government securities that changes the quantity of reserves by $25 billion, then the federal funds rate will ________.


A) rise to 8 percent a year
B) remain at 6 percent a year
C) fall to 4 percent a year
D) change but more information is needed to determine by how much
E) None of the above answers is correct.

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