The federal funds rate is the interest rate that:

total demand for money  (Click for List) the amount of money people want to hold as a store of value, is the sum of the transactions demand for money and the asset demand for money. M2++ raises the interested rate

The upper limit to the federal funds rate is A) the interest rate on reserves, because when the federal funds rate gets above a certain level , banks only want to hold reserves. B) the discount rate, because if the federal funds rate were to go higher, banks would borrow from the Fed instead of from other banks. C) the loan rate in the market, because banks are not willing to pay more for borrowing reserves than they get from lending. D) there is no upper limits to the federal funds rate.   2.   If the unemployment rate is falling from 4 to 3%, while the inflation rate is increasing to 5%, the Fed will most likely:   A) increase the target for the federal funds rate. B) increase the money supply C) not change much D) decrease the target for the federal funds rate E) decrease the inflation rate by setting a price ceiling.   3.    When bond interest rates fall, the relative expected return on holding stocks goes___, which means that stock demand and thereby stock prices will___ ,…

Wide Bank is a depository institution that suffers from a lack of liquidity. Would the bank be eligible for primary credit? No, because only financially strong institutions with ample capital are allowed to borrow from the Fed in primary credit. Yes, because depository institutions that had exhausted all of their other sources of funds can borrow money at the discount window in primary credit. Which of the following is one of the causes of the credit crunch of 2007? Primary credit The "stigma effect" Secondary credit Seasonal credit