Use a demand and supply graph for the federal funds market, Finance Basics

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Use a demand and supply graph for the federal funds market

Suppose that in equilibrium, the federal funds rate is equal to the interest rate the Fed is paying on reserves. Use a demand and supply graph for the federal funds market to analyze the effect of an open market sale of Treasury securities on the equilibrium federal funds rate.

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Finance Basics: Use a demand and supply graph for the federal funds market

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Finance Basics: Use a demand and supply graph for the federal funds market

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