In an effort to address the troubled economy, ..."For 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." Rates have not been this low "... since 2003, when the economy was growing at a snail's pace." www.csmonitor.com, 10/28/2008
The "interest rates" the Fed is cutting is the
A) reserve interest rate.
B) Federal Funds rate.
C) nominal long-term interest rate.
D) real long-term interest rate.

Question

Quizplus · Accepted Answer

The Federal Reserve primarily adjusts the Federal Funds rate as a means to influence the economy, which is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight.

In an Effort to Address the Troubled Economy