Suppose that in equilibrium the federal funds rate is equal to the interest rate the Fed is paying on reserves. Graphically show all possible cases if the Fed carries out an open market sale. Indicate in each case, what happens to the equilibrium federal funds rate, borrowed reserves, and non-borrowed reserves.

Which of the following actions is most likely to result in a decrease in the money supply? a. the discount rate on overnight loans is lowered. b. the government sells a new batch of treasury bonds. c. the federal reserve bank buys treasury bonds. d. the required reserve ratio for banks is decreased. 2b2t

Adding a complementary product to what is currently being produced is a demand management strategy used when: a. capacity exceeds demand for a product that has stable demand.b. price increases have failed to bring about demand management.c. demand exceeds capacity.d. demand exceeds 100 percent.e. the existing product has seasonal or cyclical demand.

What happens when the government finances a job creation project through taxes and borrowing?