Question

Determining whether to raise or lower the Federal Funds Rate is a responsibility of __________.

A. the central bank

B. the credit unions

C. the government

D. the commercial banks

Answer 1

Option A

A. the central bank

Step-by-step explanation:

The Federal Funds Rate refers to the maximum interest rate at which commercial banks can borrow money, and lend their surplus to other commercial banks. These interest charges are usually done on an overnight basis.

The central bank of a nation is responsible for the raising or lowering of the Federal Funds rate. The Central bank can lower the Federal Funds Rate to ensure that low-interest rates are given to businesses to enable them to expand and enrich the economy of the nation.