Why do some investment banks, money market mutual funds and other financial firms often borrow overnight loan?

Hi, Prof. Lin, I have a question. I know lower interest rates increase consumption and investment components in aggregate demand, but the increase in consumption can contradict the increase in investment. The text says, lower interest rates reduce the return to saving, so households save less and spend more. However, if households save less, the investment will decrease while the consumption increase. Also, in the text, "as interest declines, stocks becomes a more attractive investment". Therefore, is it right to say that the decline in households saving is less than the increase in stock investment, leading to a increase in investment? The book does not mention it.

Hi, professor, I think there is a contradiction between Q17 and Q18.
In Q17, the correct answer is that contractionary monetary policy doesn't cause the price level fall, it only causes the price level to rise by less than it would have without the policy. However, in Q18, the correct answer is that contractionary monetary policy causes a lowever price level and lower GDP... I am very confused about these two question... I think the answer of Q17 is B...

Hi, Lin. I don't understand Choice B. Why the price is driven up but interst rate is driven down?

page918 in the textbook mentioned that money supply and interest rate are the two monetary policy targets, but page923in the textbook mentioned that Fed uses federal funds rate as a monetary policy target. Are money supply, interest rat and federal fund rate both the targets of the monetary policy?

I do not know why.

I think more interest rate will have more foreign investment.So the net export should rise because we sell more assets.Why it falls?