The money creation process suppose first main street bank, second republic bank, and third fidelity bank all have zero excess reserves. the required reserve ratio is 10%. the federal reserve buys a government bond worth $500,000 from eric, a client of first main street bank. he deposits the money into his checking account at first main street bank.

Which of the following is an effective strategy when interest rates are falling? a. use long-term loans to take advantage of current low rates. b. use short-term loans to take advantage of lower rates when you refinance a loan. c. deposit to a short-term savings instrumentals to take advantage of higher interest rates when they mature. d.select short-term savings instruments to lock in earnings at a current high rates.