If the Fed decreases the discount rate, what happens to reserves and the money supply?
a. Reserves increase and the money supply decreases.
b. Both increase.
c. Reserves decrease and the money supply increases.
d. Both decrease.
b
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Which of the following is a similarity between an English auction and a Dutch auction?
A) The second-highest bidder wins the good in both auctions. B) The bidder who values the good the most wins it in both auctions. C) The bidders submit their bids privately at the same time in case of both auctions. D) In both auctions, the bidders submit their bids privately at different times during the bidding process.
If the federal funds rate is below the equilibrium federal funds rate, then the supply of reserves would be __________ than the demand for reserves and the banks would try to __________ reserves causing the federal funds rate to fall
A) greater than; lend B) greater than; borrow C) less than; lend D) less than; borrow