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Everything else remaining unchanged, what will happen if the Fed sells government bonds in the open ...

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Everything else remaining unchanged, what will happen if the Fed sells government bonds in the open ...

Everything else remaining unchanged, what will happen if the Fed sells government bonds in the open market and the value of borrowed reserves is zero?

▸ It will cause both the equilibrium federal funds rate and the equilibrium quantity of reserves to fall.

▸ It will cause the equilibrium federal funds rate to rise and the equilibrium quantity of reserves to fall.

▸ It will cause the equilibrium federal funds rate to fall, but there will be no change in the equilibrium quantity of reserves.

▸ It will cause the equilibrium federal funds rate to rise, but there will be no change in the equilibrium quantity of reserves.

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Macroeconomics

Edition: 3^rd

Authors: Acemoglu, Laibson, List

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imomo Author

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this is exactly what I needed

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Thank you, thank you, thank you!

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