Since October 2008, banks can do the following with their reserves: O a. hold their reserves with the Fed and earn the federal funds rate. O b. hold their reserves with the Fed and earn the interest on reserves (IOR) rate. O c. lend out their reserves in the federal funds market and earn the discount rate. O d. create loans with their reserves and earn the federal funds rate.

Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter11: The Monetary System
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Since October 2008, banks can do the following with their reserves:
O a. hold their reserves with the Fed and earn the federal funds rate.
O b. hold their reserves with the Fed and earn the interest on reserves (IOR) rate.
O c lend out their reserves in the federal funds market and earn the discount rate.
O d. create loans with their reserves and earn the federal funds rate.
Transcribed Image Text:Since October 2008, banks can do the following with their reserves: O a. hold their reserves with the Fed and earn the federal funds rate. O b. hold their reserves with the Fed and earn the interest on reserves (IOR) rate. O c lend out their reserves in the federal funds market and earn the discount rate. O d. create loans with their reserves and earn the federal funds rate.
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