D Question 3 In the market for reserves, suppose that the federal funds rate and discount rate are both at 7%. If the Federal Reserve Bank sells securities in the open market, then the equilibrium rate for reserves will and the amount of borrowed reserves will O not change; decrease not change; increase rise; increase rise; decrease Question 4 When the Federal Reserve Bank lowers the reserve requirements for commercial banks in the economy, this causes the curve for reserves to decrease and so the curve shifts to the, demand; right demand; left O supply; right O supply; left

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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**Question 3**

In the market for reserves, suppose that the federal funds rate and discount rate are both at 7%. If the Federal Reserve Bank sells securities in the open market, then the equilibrium rate for reserves will _____ and the amount of borrowed reserves will _____.

- O not change; decrease
- O not change; increase
- O rise; increase
- O rise; decrease

**Question 4**

When the Federal Reserve Bank lowers the reserve requirements for commercial banks in the economy, this causes the _____ curve for reserves to decrease and so the curve shifts to the _____.

- O demand; right
- O demand; left
- O supply; right
- O supply; left
Transcribed Image Text:**Question 3** In the market for reserves, suppose that the federal funds rate and discount rate are both at 7%. If the Federal Reserve Bank sells securities in the open market, then the equilibrium rate for reserves will _____ and the amount of borrowed reserves will _____. - O not change; decrease - O not change; increase - O rise; increase - O rise; decrease **Question 4** When the Federal Reserve Bank lowers the reserve requirements for commercial banks in the economy, this causes the _____ curve for reserves to decrease and so the curve shifts to the _____. - O demand; right - O demand; left - O supply; right - O supply; left
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