ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Buy buying or selling government bonds(securities)
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By lowering the reserve requirement
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by chilling
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By raising taxes
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Detailed explanation-1: -The federal funds rate is the target interest rate set by the FOMC. This is the rate at which commercial banks borrow and lend their excess reserves to each other overnight. The FOMC sets a target federal funds rate eight times a year, based on prevailing economic conditions.
Detailed explanation-2: -The federal funds rate is the interest rate that financial institutions charge each other for loans in the overnight market for reserves.
Detailed explanation-3: -That’s where the FFR comes in. It’s the rate that banks charge each other for overnight loans. The Fed maintained its target FFR range at 0% to 0.25% in January 2022, then increased it to 0.25% to 0.50% in March 2022.
Detailed explanation-4: -Overnight Federal Funds Rate is at 4.57%, compared to 4.57% the previous market day and 0.08% last year. This is lower than the long term average of 4.60%.