In November 2008 the central bank began to pay interest on reserves held at the bank. a.
Question:
a. What effect would you expect this to have on excess reserves?
b. Did banks generally favor or oppose this action?
c. Would central banks generally favor or oppose this action?
d. What effect did this probably have on interest rates paid by banks?
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a This would increase excess reserves enormously b Banks would most likely favo...View the full answer
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