Answered

The Fed can decrease the federal funds rate by:

A. Simply announcing a lower rate because the Fed has direct control of this interest rate.
B. Changing the money multiplier.
C. Buying government bonds, which causes market interest rates to fall.
D. Selling government bonds.



Answer :

GinnyAnswer

Final answer:

The Fed can lower the federal funds rate by buying government bonds to increase the money supply and decrease interest rates.


Explanation:

The Fed can decrease the federal funds rate by buying government bonds, which causes market interest rates to fall. By increasing the money supply through these purchases, interest rates are reduced. This is achieved through the Fed's open market operations (OMO).


Learn more about Federal Reserve and Open Market Operations here:

https://brainly.com/question/33445266


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