Why does the Fed use the ON RRP rate as a supplement to the interest on reserve balances rate? Because financial institutions can earn interest on reserve balances plus the ON RRP rate Because the ON RRP rate is higher than the IORB rate O Because financial institutions that cannot earn the IORB rate can earn the ON RRP rate Because financial institutions that cannot earn the ON RRP rate can earn the IORB rate

Macroeconomics
13th Edition
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter13: The Federal Reserve System
Section: Chapter Questions
Problem 11QP
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Why does the Fed use the ON RRP rate as a supplement to
the interest on reserve balances rate?
Because financial institutions can earn interest on reserve
balances plus the ON RRP rate
Because the ON RRP rate is higher than the IORB rate
Because financial institutions that cannot earn the IORB rate
can earn the ON RRP rate
Because financial institutions that cannot earn the ON RRP
rate can earn the IORB rate
Transcribed Image Text:Why does the Fed use the ON RRP rate as a supplement to the interest on reserve balances rate? Because financial institutions can earn interest on reserve balances plus the ON RRP rate Because the ON RRP rate is higher than the IORB rate Because financial institutions that cannot earn the IORB rate can earn the ON RRP rate Because financial institutions that cannot earn the ON RRP rate can earn the IORB rate
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