AnswersIL-EconomicsMonetary Policy: The Federal Reserve

Monetary Policy: The Federal Reserve Answers

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Federal Reserve Interest RateLoan Interest Rate✔ Federal Funds Rate

A
Federal Reserve Interest Rate
B
Loan Interest Rate
C
Federal Funds Rate
3

✔ increasedecreasestay the same

A
increase
B
decrease
C
stay the same
4

In this scenario, what is the Fed trying to do by increasing interest rates? Check all that apply.

A
decrease the amount of money that banks have to lend
B
increase the money supply for banks
C
reduce the amount of available credit
D
discourage consumer borrowing by increasing interest rates on loans
E
encourage banks to loan more money

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