The federal funds rate is the interest rate that A. banks charge one another for loans. B. banks charge the Fed for loans. C. the Fed charges banks for loans. D. the Fed charges congress for loans. To increase the money supply, the Fed could A. sell government bonds. B. decrease the discount rate. C. increase the reserve requirement. D. None of the above is correct.
Added by Kathleen L.
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So, the correct answer is A. banks charge one another for loans. To increase the money supply, the Fed could take certain actions. Selling government bonds would actually decrease the money supply, so A is not the correct answer. Decreasing the discount rate Show more…
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