Money and Banking_Quiz 5 Answers 16_aug

Money and Banking_Quiz 5 Answers 16_aug - Money and Banking...

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Money and Banking Summer 2010 Economics 220:301 Section H6 July 12 th - August 18 th Monday & Wednesday 6pm - 9:40pm 202 Scott Hall, College Ave Instructor: Georgia Bush STUDENT NAME: Quiz 5, August 16 th ch15 1) In what market is the Fed Funds rate determined? (Market for Reserves, overnight loans of reserves from one bank to another) (1 point) 2a) What determines the floor for the Fed Funds rate? and the ceiling for the Fed Funds rate? (interest paid on excess reserves, discount rate) (2 points) 3) What does BR stand for? What does NBR stand for? (Borrowed Reserves, Non-borrowed Reserves) (2 points) 6) What is the opportunity cost to a bank of holding excess reserves? (i-rate that could have been earned by lending out - interest paid on excess reserves, ier) (2 points) 5) In our diagram of partial equilibrium used to analyze the fed funds rate, a) what aspect of the demand curve illustrates the fact that as banks earn less and less by lending in the overnight market, they will keep more of the reserves
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Money and Banking_Quiz 5 Answers 16_aug - Money and Banking...

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