Question

If the Fed wants to discourage commercial bank lending, it will Group of answer choices buy government securities from commercial banks. increase the interest paid on excess reserves held at the Fed. decrease the interest paid on excess reserves held at the Fed. lower the federal funds rate target.

Answer 1

Answer:

increase the interest paid on excess reserves held at the Fed

Explanation:

Commercial lending is a loan that is between a business and a financial institution where large sums of money are taken by the business to fund major expenditures that they're unable to afford.

Therefore, one way that the federal government can discourage commercial lending would be to increase the interest paid on excess reserves held at the Fed. This would force the borrowers to pay more interest and make them reconsider taking a commercial loan.