If the Federal Reserve lowers the target federal funds rate, Group of answer choices the discount rate rises liquidity in the banking system is increased securities prices fall required reserves are decreased

Liquidity in the banking system is increased

Explanation:

The Federal Funds rate is the interest rate at which commercial banks are allowed to lend each other their excess reserves overnight to meet reserve requirements.

If this rate were to be reduced, it would make lending cheaper between banks who would then take advantage of this to borrow more occasionally. This will then translate to a higher liquidity amongst the banks.

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