When the federal funds interest rate is 6 percent, the quantity of reserves demanded is $100 billion. If the quantity of reserves is actually $110 billion, then the

Question

Quizplus · Accepted Answer

When the quantity of reserves exceeds the quantity demanded, the federal funds rate typically falls as banks have excess reserves and are willing to lend them at lower rates.

When the Federal Funds Interest Rate Is 6 Percent, the Quantity