If the Fed uses the federal funds rate as a policy instrument, then increases in the demand for reserves will lead to:

• Level of reserves [ Select ] ["remains unchanged", "increase", "decrease"]
• Supply curve [ Select ] ["shifts left", "shifts right", "remains unchanged"]
• Demand curve [ Select ] ["remains unchanged", "shifts right", "shifts left"]
• Federal funds rate [ Select ] ["remains unchanged", "decrease", "increase"]

If the Fed uses the level of reserves as a policy instrument, then increases in the demand for reserves will lead to:

• Level of reserves [ Select ] ["remains unchanged", "increase", "decrease"]
• Supply curve [ Select ] ["remains unchanged", "decrease", "increase"]
• Demand curve [ Select ] ["shifts right", "remains unchanged", "shifts left"]
• Federal funds rate [ Select ] ["decrease", "increase", "remains unchanged"]