When the federal funds rate equals the interest rate paid on excess reserves a. the demand curve for reserves is vertical b. the demand curve for reserves is horizontal c. the supply curve of reserves is vertical d. the supply curve of reserves is horizontal

B. the demand curve for reserves is horizontal

Explanation:

According to my research on various economic studies, I can say that based on the information provided within the question this would lead the demand curve for reserves is horizontal. This is because a higher federal funds rate means that there is a higher opportunity cost of holding reserves rather than lending them to banks. Therefore at the interest rate on reserves, the demand curve is horizontal.

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