The federal funds (Fed funds) rate is the interest rate Question 1 options: bank
ID: 1225791 • Letter: T
Question
The federal funds (Fed funds) rate is the interest rate
Question 1 options:
banks charge their loan customers.
banks pay on certificates of deposit.
banks charge other banks when they loan excess reserves to each other.
the Fed pays on reserves held by banks.
the Fed charges when it lends reserves to banks.
The Federal Reserve System
Question 2 options:
is the lender of last resort for commercial banks.
controls the money supply.
is the central bank of the United States.
is another name for the U.S. government Treasury.
a, b, and c above
If banks are currently holding zero excess reserves and the Fed raises the required-reserve ratio, which of the following will happen?
Question 3 options:
Banks will have a reserve deficiency and will look to sell assets or securities to raise cash (reserves).
Banks will have positive excess reserves.
Banks will begin to extend more loans.
Banks will begin to extend more credit.
b and d
banks charge their loan customers.
banks pay on certificates of deposit.
banks charge other banks when they loan excess reserves to each other.
the Fed pays on reserves held by banks.
the Fed charges when it lends reserves to banks.
The Federal Reserve System
Question 2 options:
is the lender of last resort for commercial banks.
controls the money supply.
is the central bank of the United States.
is another name for the U.S. government Treasury.
a, b, and c above
If banks are currently holding zero excess reserves and the Fed raises the required-reserve ratio, which of the following will happen?
Question 3 options:
Banks will have a reserve deficiency and will look to sell assets or securities to raise cash (reserves).
Banks will have positive excess reserves.
Banks will begin to extend more loans.
Banks will begin to extend more credit.
b and d
Explanation / Answer
1. The fed charges when it lends reserves to bank.
2.a b and c above.
3.Banks will have a reserve deficiency and will look to sell assets or securities to raise cash (reserves).
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