Okay Andy:
When the Fed Funds rate equals the discount rate:
a) the demand curve for reserves is horizontal
b) the supply curve for reserves is horizontal
c) the demand curve for reserves is vertical
d) the supply curve of reserves is horitobtal
In the market for reserves, an open market purchase_________the supply of reserves and causes the fed funds interest rate to_________, everything else held constant.
a) increase, fall b) decrease, fall c) increase, rise d) decrease, rise