In an effort to address the troubled economy, ...ʺFor the ninth time in just over a year, the Federal Reserve is expected to cut interest rates, quite possibly its last reduction in this downturn.ʺ Rates have not been this low ʺ... since 2003, when the economy was growing at a snailʹs pace.
The ʺinterest ratesʺ the Fed is cutting is the__________ .

Question

Quizplus · Accepted Answer

The Federal Funds rate is the interest rate at which banks can lend and borrow balances from each other overnight. This is the rate that the Federal Reserve has direct control over and has been cutting in an effort to stimulate the economy. The other options (real long-term interest rate, reserve interest rate, and nominal long-term interest rate) are not directly controlled by the Federal Reserve and are not the rates being cut in this scenario.

In an Effort to Address the Troubled Economy