Question: Question 2 (worth 25 points) Everything else held constant, in the market for reserves, when the demand for federal funds intersects the reserve supply curve

Question 2 (worth 25 points) Everything else held constant, in the

Question 2 (worth 25 points) Everything else held constant, in the market for reserves, when the demand for federal funds intersects the reserve supply curve along the horizontal section of the supply curve, increasing the discount rate A) increases the federal funds rate. B) lowers the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect on the federal funds rate. Answer: Draw a graph to illustrate your answer. No graph, no credit

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