If the federal reserve increases the interest rate on bank deposits at the fed, banks will want to hold a. fewer reserves, so the money multiplier will fall. b. fewer reserves, so the money multiplier will rise. c. more reserves, so the money multiplier will fall. d. more reserves, so the money multiplier will rise.

Jamie is saving for a trip to europe. she has an existing savings account that earns 3 percent annual interest and has a current balance of $4,200. jamie doesn’t want to use her current savings for vacation, so she decides to borrow the $1,600 she needs for travel expenses. she will repay the loan in exactly one year. the annual interest rate is 6 percent. a. if jamie were to withdraw the $1,600 from her savings account to finance the trip, how much interest would she forgo? .b. if jamie borrows the $1,600 how much will she pay in interest? c. how much does the trip cost her if she borrows rather than dip into her savings?