
-The figure above shows the market for bank reserves in Futureland.If the Bank of Futureland undertakes an open market sale of government securities that changes the quantity of reserves by $25 billion, then the federal funds rate will ________.
A) rise to 6 percent a year
B) remain at 4 percent a year
C) fall to 4 percent a year
D) change but more information is needed to determine by how much
E) None of the above answers is correct.
Correct Answer:
Verified
Q46: A hike in the federal funds rate
Q47: If the Fed carries out an open
Q48: In an open market purchase, the Fed
Q49: In order to lower the federal funds
Q50: If the Fed carries out an open
Q52: When the Fed sells government securities, banks'
Q53: The Fed _ influence the real interest
Q55: In order to raise the federal funds
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