If the demand for reserves is unchanged, an increase in the quantity of reserves will
A. increase the federal funds rate.
B. lower the federal funds rate.
C. not affect the federal funds rate.
D. None of the above answers is correct.
Answer:B
If the demand for reserves is unchanged, an increase in the quantity of reserves will
A. increase the federal funds rate. B. lower the federal funds rate. C. not affect the federal funds rate. D. None of the above answers is correct.