A situation in which the Fed's target interest rate has fallen as far as it can fall is sometimes described as a
a. liquidity preference.
b. liquidity trap.
c. open-market trap.
d. interest-rate contraction.
b
Economics
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How does the Fed increase the level of reserves in the banking system?
A) by lowering interest rates B) by buying bonds C) by raising interest rates D) by selling bonds
Economics
The difference in the selling and purchase prices of government securities in a typical overnight repurchase agreement is set to reflect
A) the difference in the auction price of the securities and their current market price. B) the overnight cost of funds. C) LIBOR. D) the discount on Treasury bills.
Economics