If the Federal Reserve lowers the target federal
Funds rate,

Question

Quizplus · Accepted Answer

When the Federal Reserve lowers the target federal funds rate, it becomes cheaper for banks to borrow money from the Fed or from other banks. This increases liquidity in the banking system as banks are more likely to lend to each other, potentially increasing the money supply. The discount rate is not directly affected by the federal funds rate, and neither are required reserves or securities prices.

If the Federal Reserve Lowers the Target Federal