Which of the following statements about the overnight loans rate is false?

Question

Quizplus · Accepted Answer

The statement "the higher the overnight loans rate, the greater the quantity of money" is false. A rise in the overnight loans rate indicates a tightening of monetary policy, which reduces the quantity of money in circulation. The other statements are true. The overnight loans rate and the treasury bill rate are closely related, the overnight loans rate is typically less than long-term bond rates, and the rates trend in the same direction. Short-term rates are generally more volatile than long-term rates, so the long-term bond rate fluctuates less than the short-term rates.

Which of the Following Statements About the Overnight Loans Rate