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Suppose the discount rate is below the federal funds

Suppose the discount rate is below the federal funds 2 questions!6. Suppose the discount rate is below the federal funds rate, and banks can borrow as much as they want from the Fed. What would happen to the federal funds rate? A. The federal funds rate would fall, but stay above the discount rate.B. The federal funds rate would fall to the level of the discount rate.C. The federal funds rate would rise.D. The question cannot be answered without additional information.—————-11. The Fed bought an unusually large quantity of Treasury bonds at the end of December 1999. What explains this behavior? (Hint: search online for“Y2K”.) A. In anticipation of Y2K the ratio R/D increased and the Fed needed to buy large quantities of Treasury bonds to keep the money supply constant.B. In anticipation of Y2K the ratio C/D increased, and the Fed needed to buy large quantities of Treasury bonds to keep the money supply constant.C. In anticipation of Y2K the monetary base decreased, and the Fed needed to buy large quantities of Treasury bonds to keep the money supply constant.D. In anticipation of Y2K the banks increased reserves, and the Fed needed to sell large quantities of Treasury bonds to keep the money supply constant.