The larger the supply of reserves and the lower the Fed funds rate, the
A)higher the concern about the economy.
B)higher the interest rate.
C)higher the monetary growth rate.
D)lower the monetary growth rate.

Question

Quizplus · Accepted Answer

When the supply of reserves is larger and the Fed funds rate is lower, it usually results in a higher monetary growth rate. This is because banks have more reserves to lend out, increasing the money supply and potentially leading to inflation.

The Larger the Supply of Reserves and the Lower the Fed