The quantity of reserves supplied increases as interest rates rise because
a. the Treasury borrows more at higher interest rates.
b. consumers don't want to borrow as much so more money is left in banks.
c. as interest rates rise, banks fear losses so they decrease lending.
d. banks find it more profitable to loan out excess reserves to other banks.
d
You might also like to view...
The most appropriate countercyclical policy, or stabilization policy, in times of unemployment, according to classical economists, is for the government to:
a. increase the minimum wage. b. impose wage and price controls. c. stimulate aggregate demand. d. cut taxes. e. do nothing.
If robotics and factory automation become more widespread in an industry and all else is held constant:
A. both the demand for labor in that industry and the wage rate should decrease. B. the demand for labor should increase in that industry and the wage rate should decrease. C. both the demand for labor in that industry and the wage rate should increase. D. the demand for labor should decrease in that industry and the wage rate should increase.