Question

An open market purchase will cause Question 32 options: Borrowed reserves to rise and the Fed Fund Rate to fall Nonborrowed reserves to rise and the Fed Fund Rate to fall Nonborrowed reserves to fall and the Fed Fund Rate to rise Borrowed reserves to fall and the Fed Fund Rate to rise

Answer 1

Answer:

Non Borrowed reserves to rise and the Fed Fund Rate to fall

Explanation:

An open market purchase is when the Central bank buys securities from banks. This increases money supply, increases the federal funds rate to fall and increases reserves

Borrowed reserves are monies borrowed by banks from the central bank to maintain required reserves.