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Why is it that a decrease in the discount rate does not normally lead to an increase in borrowed reserves? use the supply and demand analysis of the market for reserves to explain?
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Why is it that a decrease in the discount rate does not normally lead to an increase in borrowed reserves? use the supply and demand analysis of the market for reserves to explain?

User Lycana
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The equilibrium interest rate (where supply of money equals demand for borrowing) will still fall below the discount rate.

User Kirkland
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