The supply curve of reserves has two kinks in it: one at the _________________ and the other at the ____________________ rate.

Name: The supply curve of reserves has two kinks in it: one at the _________________ and the other at the ____________________ rate.
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Question

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The supply curve of reserves has kinks at the interest rate that the Fed pays on reserves and the discount rate. The interest rate on reserves sets a floor, while the discount rate sets a ceiling.

The Supply Curve of Reserves Has Two Kinks in It