3. How is the interest on reserve balances rate a reservation rate? a. Banks should not demand a higher rate for their funds. b. Banks should not be willing to accept a lower rate for their funds. C. Banks should not supply funds at a higher rate for their funds. d. Banks should demand lower rates for their funds.

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Monetary System
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3. How is the interest on reserve balances rate a reservation rate?
a. Banks should not demand a higher rate for their funds.
b. Banks should not be willing to accept a lower rate for their funds.
c. Banks should not supply funds at a higher rate for their funds.
d. Banks should demand lower rates for their funds.
Transcribed Image Text:3. How is the interest on reserve balances rate a reservation rate? a. Banks should not demand a higher rate for their funds. b. Banks should not be willing to accept a lower rate for their funds. c. Banks should not supply funds at a higher rate for their funds. d. Banks should demand lower rates for their funds.
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