In order to stimulate the economy and reduce unemployment, the Fed would traditionally set a lower target for the federal funds rate.

Question

Quizplus · Accepted Answer

By lowering the target for the federal funds rate, it becomes cheaper for banks to borrow money from each other and also to lend to businesses and consumers, which can encourage spending and investment, ultimately stimulating economic growth and reducing unemployment.

In Order to Stimulate the Economy and Reduce Unemployment, the Fed