The Trading Desk derives the reserve need, which is the difference, if any, between actual reserves and those projected to be need to keep the ________ at the desired level.
A)federal funds rate
B)prime interest rate
C)discount rate
D)inflation rate

Question

Quizplus · Accepted Answer

The Federal Reserve uses the federal funds rate as the primary tool to influence the money supply and achieve its monetary policy objectives. The reserve need is based on maintaining the federal funds rate at the desired level.

The Trading Desk Derives the Reserve Need, Which Is the Difference