Changes in which of the following will cause changes in the equilibrium federal funds rate?

Question

Quizplus · Accepted Answer

All of the factors listed (demand for excess reserves, demand for required reserves, and supply of reserves through past open market operations) can impact the level of reserves in the banking system, which in turn can affect the federal funds rate. An increase in the demand for excess reserves or required reserves would lead to banks holding onto more reserves, thereby reducing the supply of reserves available to other banks and potentially driving up the federal funds rate. Conversely, an increase in the supply of reserves (such as through past open market operations) would increase the amount of reserves available to banks, potentially putting downward pressure on the federal funds rate.

Changes in Which of the Following Will Cause Changes in the Equilibrium