The main cause of the decline in the numberof commercial banks in the United States in the past forty yearshas been

a.bank failures

b.competition in the banking industry.

c.bank mergers

d.the Dodd-Frank Act.

e.the decline in the number of bank holding companies.

Suppose that in the simple deposit expansion multiplier model,the required reserve ratio (r)is 0.1.In this case,

a.an increase in reserves of $100,000will lead to an increase in deposits of $10,000.

b.an increase in reserves has no effect on demand deposits.

c.an increase in deposits of $10,000will lead to an increase in reserves of $100,000.

d.an increase in deposits of $100,000will lead to an increase in reserves of $10,000.

e.an increase in reserves of $10,000will lead to an increase in deposits of $100,000.

Using the market for reserves, describe how the Fed maintains the target range for the federal funds rate.