The demand for Federal funds is downsloping because higher interest rates discou

Question

The demand for Federal funds is

downsloping because higher interest rates discourage commercial banks from borrowing Federal funds, but lower rates will encourage borrowing.

downsloping because higher interest rate encourage commercial banks to borrow Federal funds.

upsloping because higher interest rate encourage commercial banks to lend Federal funds.

upsloping because higher interest rates discourage commercial banks from lending Federal funds.

downsloping because higher interest rates discourage commercial banks from borrowing Federal funds, but lower rates will encourage borrowing.

downsloping because higher interest rate encourage commercial banks to borrow Federal funds.

upsloping because higher interest rate encourage commercial banks to lend Federal funds.

upsloping because higher interest rates discourage commercial banks from lending Federal funds.

Explanation / Answer

A

downsloping because higher interest rates discourage commercial banks from borrowing Federal funds, but lower rates will encourage borrowing.

A

downsloping because higher interest rates discourage commercial banks from borrowing Federal funds, but lower rates will encourage borrowing.

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