Question
If the federal funds rate is currently equal to the discount rate, a decrease in the interest rate paid on reserves will decrease the federal
If the federal funds rate is currently equal to the discount rate,
a decrease in the interest rate paid on reserves will decrease the federal funds rate. | ||
an increase in reserve requirements will increase the federal funds rate. | ||
a large enough decrease in reserve requirements can decrease the federal funds rate. | ||
An increase in the discount rate will not change the federal funds rate. |
rise in the interest rate on reserves
does not change the demand curve for reserves. | ||
increases the federal funds rate only if the federal funds rate is lower than the new interest rate on reserves. | ||
does not change the federal funds rate. | ||
increases the federal funds rate only if the federal funds rate is equal to the initial interest rate on reserves. |
Suppose the federal reserve decreases the required reserve ratio but the federal funds rate stays the same. Which of the following is false?
The federal funds rate is equal to the discount rate. | ||
The supply of reserves intersect the demand for reserves at the horizontal portion of the demand for reserves. | ||
If the required reserve ratio keeps decreasing, the federal funds rate might start to decrease. | ||
The demand for reserves intersect the supply of reserves at the horizontal portion of the supply of reserves. |
If a decrease in discount rate does not affect the federal funds rate,
both borrowed and nonborrowed reserves are not equal to zero. | ||
nonborrowed reserves is equal to zero. | ||
borrowed reserves is equal to zero. | ||
both borrowed and nonborrowed reserves are equal to zero. |
The federal reserve conducts an open market purchase. Which of the following is not a possible effect?
An increase in the federal funds rate. | ||
The demand for reserves shift to the left. | ||
A decrease in nonborrowed reserves. | ||
The federal funds rate stays the same. |
The federal funds rate can only fluctuate in between _________ and __________.
discount rate; require reserve ratio | ||
overnight rate; interest rate on reserves | ||
discount rate; interest rate on reserves | ||
discount rate; overnight rate |
Which of the following will shift the aggregate demand curve to the right?
An increase in income taxes. | ||
An increase in financial friction. | ||
Appreciation of the U.S. dollars. | ||
An increase in government expenditure. |
The slope of the short-run aggregate supply curve is affected by
the real interest rate. | ||
the level of financial friction. | ||
the stickiness of prices. | ||
the responsiveness of the Fed. |
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