In 2012,the federal funds rate was 0.15 percent,which means that the opportunity cost of holding reserves was ________ and consequently banks had a ________ incentive to economize on reserves.

Question

Quizplus · Accepted Answer

A federal funds rate of 0.15 percent is considered low, which means that the opportunity cost of holding reserves is also low. Therefore, banks have a small incentive to economize on reserves.

In 2012,the Federal Funds Rate Was 0