Which of the following statements are TRUE about the Federal Funds rate?
I The Federal Funds rate is set by the Federal Reserve and is the rate at which member banks can borrow reserves from the Fed
II Federal Reserve actions taken by the FOMC will influence the Federal Funds rate
III The Federal Funds Rate is lower than the discount rate
IV The "Effective" Federal Funds rate is the daily compounded rate of interest paid by borrowers
Answer: II and III only