Answer:
Sales decreases
Explanation:
In this question, we are asked to state what happens in terms of sales in a reserves market given that the federal funds rate is above the interest paid on excess reserves
A reserves market simply refers to that market that contains that amount of money held by the government.
Now, given that the federal funds rate is above the interest paid on these reserves, it will have an effect on the open market as sales will decrease. This causes a ripple effect on the supply of reserves by raising the federal funds interest rate
