If the Fed governors wanted to put downward pressure on the FFR, it would likely

Question

Quizplus · Accepted Answer

Purchasing government bonds from banks would increase the money supply in the economy, lowering the FFR as banks have more funds to lend out. Selling government bonds to banks would decrease the money supply, putting upward pressure on the FFR. Increasing the reserve requirement and discount rate would also have the opposite effect by reducing the available funds for banks to lend, putting upward pressure on the FFR.

If the Fed Governors Wanted to Put Downward Pressure on the FFR