The demand for reserves consists of non-borrowed reserves plus borrowed reserves.

True

False

In the Keynesian liquiditypreference model, an increase in the money supply leads to a decrease in interest rates.

True

False

Banks help to reduce the transactions costs of borrowing and lending through

a.economies of scale and expertise.

b.the holding of excess reserves.

c.direct and indirect finance.

d.moral hazard and adverse selection.

e.liquidity management and liability management.