An indication to the Open Market Account Manager that commercial banks are experiencing a liquidity surplus would be a
A) falling federal funds rate.
B) rising federal funds rate.
C) falling discount rate.
D) rising discount rate.

Question

Quizplus · Accepted Answer

A falling federal funds rate indicates that banks have excess reserves and are willing to lend to other banks at a lower interest rate. This suggests a liquidity surplus in the banking system.

An Indication to the Open Market Account Manager That Commercial