Which of the following statements is true of the federal funds market?
A) No banks are refused loans in the federal funds market.
B) Although the federal funds market aims to provide liquidity to needy banks, it is not very popular as overnight loans are logistically inefficient for large banks.
C) In the federal funds market, banks with a shortage of reserves borrow funds, while banks with an excess of reserves lends them out.
D) The interbank lending system works more efficiently in periods of financial panic than in periods of financial stability.
Question 2
Money is the standard of exchange by which any type of goods can be purchased.
Indicate whether the statement is true or false
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