1) Everything else held constant, in the market for reserves, decreases in the interest rate paid on excess reserves affect the federal funds rate
A) when the funds rate is below the interest rate paid on excess reserves.
B) when the funds rate equals the interest rate paid on excess reserves.
C) when the funds rate is below the discount rate.
D) when the funds rate equals the discount rate.
2) The Federal Reserve usually keeps the discount rate
A) above the target federal funds rate.
B) equal to the target federal funds rate.
C) below the target federal funds rate.
D) equal to zero.
3) Everything else held constant, the vertical section of the supply curve of reserves is shortened when the
A) discount rate increases.
B) discount rate decreases.
C) federal funds rate rises.
D) federal funds rate falls.
4) Everything else held constant, the vertical section of the supply curve of reserves is lengthened when the
A) discount rate increases.
B) discount rate decreases.
C) federal funds rate rises.
D) federal funds rate falls.