12) The federal funds rate is the interest rate the Fed charges com mercial bank

Question

12) The federal funds rate is the interest rate the Fed charges com mercial banks. a) True b) False 13) A decrease in interest rates a) decreases investment spending and increases consumption spending. b) decreases investment spending and decreases consumption spending c) increases investment spending and decrea ses consumption spending. d) increases investment spending and increases consumption spending. 14) Automatic stabilizers refer to the money supply and interest rates that automatically increase or decrea se along with the business cycle. a) True b) False

Explanation / Answer

Q12

Answer

False

the federal fund rate is a rate charged by banks to other banks for overnight borrowings.

Q13

Answer

Option d

both will increase because the decreased interest rate decreases the cost of borrowing funds which increases consumption as well as investment.

Q14

Answer

False

the taxes and transfer payments are automatic stabilizers, not the interest rates.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.