Which of the following occurs in the Federal Funds market?
A) Banks borrow from one another.
B) Federally backed mortgage loans are negotiated.
C) The Federal Reserve lends funds to depository institutions.
D) The federal government sells securities to finance deficit budgets.

Question

Quizplus · Accepted Answer

In the Federal Funds market, banks borrow from one another to meet reserve requirements. This market does not involve the Federal Reserve lending directly to banks, federally backed mortgage negotiations, or the federal government selling securities.

Which of the Following Occurs in the Federal Funds Market