The Federal Reserve has set the discount rate at 1%. It pays 0% on Reserves. The current Federal Funds Rate is .5%. Show above what happens when the Fed uses open market operations to decrease the Federal Funds rate to 0%. How do they decrease the rate?

Answer rating: 100% (QA)

When the Federal Reserve wants to decrease the Federal Funds rate from 05 to 0 it can do so by cond... View the full answer