The fed funds rate is very important to the economy because:

Name: The fed funds rate is very important to the economy because:
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Question

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The fed funds rate is the interest rate at which banks lend excess reserves to each other overnight. It is closely related to the conduct of monetary policy because the Fed can influence the fed funds rate by buying or selling Treasury securities. The fed funds rate also measures directly the availability of excess reserves in the banking system.

The Fed Funds Rate Is Very Important to the Economy