The Fed raises the federal funds rate. Which of the following changes occurs most rapidly? A....
The Fed raises the federal funds rate. Which of the following changes occurs most rapidly?
A. consumption expenditure decreases
B. real GDP growth decreases
C. inflation rate decreases
D. aggregate demand decreases
E. exchange rate rises
Homework Answers
Option E.
- Federal funds rate is the interest rates that banks charge other banks or depository institutions for lending them loans.
- When the Fed raise this rate, the value of country's currency Increases.
- This will further increase the exchange rate very rapidly within the Economy.
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The Fed raises the federal funds rate. Which of the following
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