Multiple Choice
Which of the following observations concerning the federal funds rate is NOT true?
A) The cost of fed funds for the purchasing institution is the federal funds rate.
B) The federal funds rate is set by DIs that trade in the fed funds market.
C) The federal funds rate can vary considerably within the day.
D) The federal funds rate can vary considerably across days.
E) Rate variability has increased since the introduction of lagged reserve accounting.
Correct Answer:
Verified
Correct Answer:
Verified
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