If a bank has $6 billion in reserves and loans $2 billion to another bank, then the total quantity of reserves demanded is:
A) $6 billion. B) $8 billion. C) $2 billion. D) $4 billion.
A
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Management of expectations by a central bank is based on the view that ________
A) decreasing the federal funds rate will lead to a reduction in the discount rate B) if economic agents believe that the price of an individual asset will rise in the future, they will buy that asset today, contributing to its eventual price increase C) if households expect an increase in prices in the future, they will engage in spending today D) households will increase their spending today if they believe that the monetary authorities are committed to maintaining low interest rates
Based on the graph showing the market for loanable funds, what will happen at a real interest rate that is higher than equilibrium?
a. Lenders will compete for borrowers and interest rates will fall.
b. Lenders will compete for borrowers and interest rates will rise.
c. Borrowers will compete for loans and interest rates will fall.
d. Borrowers will compete for loans and interest rates will rise.