In borrowing and lending of federal funds, the federal funds rate is result of function between _____________?
Correct answer: D. supply and demand
- A. assets and liability
- B. cost and marketing
- C. income and expense
- D. supply and demand
Explanation
The federal funds rate is determined by the interaction of banks’ willingness to lend funds and other banks’ need to borrow them. This supply-and-demand process establishes the market rate.
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