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Suppose that the demand for federal funds curve is such that the quantity of funds demanded changes by $120 billion for each 1 percent change in the federal funds interest rate. also, assume that the current
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Suppose that the demand for federal funds curve is such that the quantity of funds demanded changes by $120 billion for each 1 percent change in the federal funds interest rate. also, assume that the current federal funds rate is at the 3 percent rate that is targeted by the fed. now suppose that the fed retargets the rate to 3.5 percent.

User Bootchk
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To answer this question, we assume that the current federal funds rate is at the 3% rate that is targeted by the fed. Now suppose that the fed retargets the rate to 3.5%
User Salo
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