Question

When the Federal Reserve announces that it is increasing the federal funds rate, we would expect to see banks do which of the following?

A. Increase the amount of loans they make since interest rates are higher

B. Reduce their loans because they have fewer reserves due to the Fed's open market sales

C. Reduce interest rates for depositors.

D. Complain about the situation

Answer 1

C.

Step-by-step explanation:

I think Reduce interest rates for depositors.