The commercial banking system borrows from the Federal Reserve Banks. As a result, the checkable deposits:
A. of commercial banks are unchanged, but their reserves increase.
B. and reserves of commercial banks both decrease.
C. of commercial banks are unchanged, but their reserves decrease.
D. and reserves of commercial banks are both unchanged.
A. of commercial banks are unchanged, but their reserves increase.
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When deciding between domestic and foreign financial investments, investors typically consider
A) domestic and foreign inflation rates and expected changes in the exchange rate. B) domestic and foreign budget deficits. C) shifts in the relative demand for foreign and domestic goods. D) domestic and foreign interest rates and expected changes in the exchange rate.
Use the following given market-for-money diagrams to answer the next question.
The asset demand for money is shown by
A. D1. B. D2. C. D3. D. S.