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The Federal Reserve, which is a part of the federal government, sets the Prime Rate, which is a rate which banks loan to each other and also the rate at which banks can borrow from the federal government. This prime rate, in turn, affects the interest rates which consumers pay for loans.
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How does the Fed influence interest rates?
The Federal Reserve controls the interest rate at which federal banks lend money. This, in turn, has a cascading effect, in which other banks interest rates are determined based on the rate set by the Fed.
During Carter's administation how did the government try to fight inflation?
The Federal Reserve began raising interest rates
Which group on the Federal Reserve organization chart decides whether to raise or lower interest rates?
board of government
A debate on whether the federal government should raise or lower interest rates is a debate about policy?
economic policy apex :)
When the federal reserve board lowers interest rates it most likely attempting to?
lower interest rates.
How does the Fed influence interest rates?
The Federal Reserve controls the interest rate at which federal banks lend money. This, in turn, has a cascading effect, in which other banks interest rates are determined based on the rate set by the Fed.
Why does the Federal Reserve cut interest rates?
banking economics us government
Federal government affect interest rates?
The federal government affects interest rates more than any other factor. They set the Fed Funds rate and the Prime rate. Fannie Mae, Freddie Mac, FHA. VA, and USDA loans are all backed or guaranteed by the federal government. Most of these loans are securitized into mortgage-backed bonds. Thus the coupon rates and performance of these bonds directly affect rates.
During Carter's administation how did the government try to fight inflation?
The Federal Reserve began raising interest rates
Which group on the Federal Reserve organization chart decides whether to raise or lower interest rates?
board of government
A debate on whether the federal government should raise or lower interest rates is a debate about policy?
economic policy apex :)
When the federal reserve board lowers interest rates it most likely attempting to?
lower interest rates.
Which types of loans have the lowest interest rates?
Federal
How can interest rates influence AD?
reduce interest rates to increase incentive to buy/spend and hence increasing AD
What is the significance of interest Rates for an economy?
the significance is that the government profit from specific interest rates in an economy
Identify the two policies that the federal government can follow in order to make the business cycle less disruptive?
federal government can lower interest rates and stimulate spending to make the business cycle less disruptive.
Which of the following terms best describes the process by which the government controls interest rates and the money supply in order to influence the economy?
monetary policy
