Scenario: The Fed raises the target federal funds rate.

Determine the impact on the reserve demand curve, reserve supply curve, federal funds rate, borrowed reserves, and nonborrowed reserves.

• Reserve demand curve [ Select ] ["shifts right", "remain unchanged", "shifts left"]
• Reserve supply curve [ Select ] ["shifts left", "remain unchanged", "shifts right"]
• Federal funds rate
  • if discount rate initially above federal funds rate [ Select ] ["decrease", "remain unchanged", "increase"]
  • if discount rate initially is at the federal funds rate [ Select ] ["remain unchanged", "decrease", "increase"]
• Borrowed reserves
  • if discount rate initially above federal funds rate [ Select ] ["increase", "remain unchanged", "decrease"]
  • if discount rate initially is at the federal funds rate [ Select ] ["increase", "remain unchanged", "decrease"]
• Nonborrowed reserves
  • if discount rate initially above federal funds rate [ Select ] ["increase", "remain unchanged", "decrease"]
  • if discount rate initially is at the federal funds rate [ Select ] ["remain unchanged", "increase", "decrease"]