To execute the policy of lowering the federal funds rate,the FOMC authorizes the New York Fed to make open-market sales to increase bank reserves until the federal funds rate falls to the target level.

Question

Quizplus · Accepted Answer

The policy of lowering the federal funds rate is executed through open market purchases (not sales) by the New York Fed, which increases bank reserves and lowers the federal funds rate until it reaches the target level.

To Execute the Policy of Lowering the Federal Funds Rate,the