if the banking system has a large amount of reserves many banks will have excess res 639704
1) If the banking system has a large amount of reserves, many banks will have excess reserves to lend and the federal funds rate will probably ________; if the level of reserves is low, few banks will have excess reserves to lend and the federal funds rate will probably ________.
A) fall; fall
B) fall; rise
C) rise; fall
D) rise; rise
2) The Federal Reserve will engage in a repurchase agreement when it wants to ________ reserves ________ in the banking system.
A) increase; permanently
B) increase; temporarily
C) decrease; temporarily
D) decrease; permanently
3) If the Fed wants to temporarily inject reserves into the banking system, it will engage in
A) a repurchase agreement.
B) a matched sale purchase transaction.
C) a reverse repurchase agreement.
D) an open market sale.
4) The Fed can offset the effects of an increase in float by engaging in
A) a repurchase agreement.
B) a matched sale purchase transaction.
C) an interest rate swap.
D) an open market purchase.