In order to influence the interest rate,the Federal Reserve System can immediately adjust the
A)reserves of the banking system.
B)inflation level.
C)unemployment rate.
D)taxes that citizens must pay.
E)amount the government borrows.

Question

Quizplus · Accepted Answer

The Federal Reserve System can adjust the interest rate by changing the reserves of the banking system. By adjusting the reserve requirements, the Federal Reserve can control the amount of money banks have available to lend, which can in turn affect the interest rates that banks charge on loans.

In Order to Influence the Interest Rate,the Federal Reserve System