The Fed can enhance liquidity in the U.S.economy by increasing the federal funds rate.

Question

Quizplus · Accepted Answer

The opposite is actually true. The Fed can enhance liquidity in the U.S. economy by decreasing the federal funds rate, as this makes borrowing cheaper and encourages spending and investment. Increasing the federal funds rate could have the opposite effect, as it would make borrowing more expensive and potentially slow down economic growth.

The Fed Can Enhance Liquidity in the U