What event may have caused the shift of the federal funds demand curve from Dff,1 to Dff,2? multiple choice 1 Banks are worried about the economic climate and the ability of borrowers to pay back funds, reducing the number of loans. An increase in the expected return on investment causes banks to make more loans to businesses. Higher interest rates on checking accounts cause households to transfer deposits in savings accounts to deposits in checking accounts. Customers hold less currency and increase their deposits at banks. b. What response is required by the Federal Reserve in order to maintain the 4% target for the federal funds rate? multiple choice 2 The Federal Reserve will need to make an open market sale to increase the quantity of reserves. The Federal Reserve will need to make an open market sale to reduce the quantity of reserves. The Federal Reserve will need to make an open market purchase to reduce the quantity of reserves. The Federal Reserve will need to make an open market purchase to increase the quantity of reserves