Question

he rate at which banks lend money and charge one another for storing money in the Fed is known as the . When the Fed carries out open market operations to lower the Federal Funds Rate, the money supply and available credit will likely .

Answer 1

Federal Funds Rate

Step-by-step explanation:

The rate at which banks lend money to each other in form of 'federal funds', that are lent & borrowed to maintain Federal Bank (central bank) reserve requirements : is called Federal Funds Rate.

Open Market Operations means buying & selling of government securities. Federal Bank would sell securities to reduce Federal Funds Rate. Federal Funds Rate reduction implies banks are getting cheaper credit from each other, to fulfil the reserve requirements. Subsequently, banks credit creation & money supply capability increases.