1 the current fed funds rate is lowerequalthe interest on, Ask an Expert

Finance

1. The current fed funds rate is (lower/equal)_the interest on excess reserves because _

A equal; no bank will lend at a lower fed funds rate when it can earn a higher rate on ioer

B lower; some financial institutions cannot access the Fed Funds market

C equal; some financial institutions cannot access the Fed Funds market

D lower; the Treasury wants to be able to borrow at a lower rate in the Fed Funds market

2. Which of the following statements are true about an open market purchase today?

A. An open market purchase results in an expansion of the selling bank's balance sheet

B. The proceeds to the selling bank will be invested in fed funds

C. Money (M1) is not created until a loan is made

D. All of the above

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92800223

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