When the Fed raises the discount rate, the _____ of reserves shifts to the
A) demand, up.
B) demand, down.
C) supply, up.
D) supply, down.

Name: When the Fed raises the discount rate, the _____ of reserves shifts to the A) demand, up. B) demand, down. C) supply, up. D) supply, down.
Brand: Quizplus
Rating: 4.8 (34 reviews)

Question

Quizplus · Accepted Answer

When the Fed raises the discount rate, the cost of borrowing reserves from the Fed increases. This makes banks less likely to borrow reserves, which shifts the demand for reserves down.

When the Fed Raises the Discount Rate, the _____ of Reserves