Multiple Choice
The federal funds rate and the quantity demanded of reserves have a(n) ____________ relationship.This is because as the federal funds rate moves down,it becomes _______________ for banks to hold reserves,encouraging banks to hold ____________ in reserves to guard against checkable deposit withdrawals.
A) inverse; more expensive; more
B) direct; more expensive; less
C) inverse; cheaper; more
D) direct; cheaper; more
Correct Answer:
Verified
Correct Answer:
Verified
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