Answered: Head of the US Federal Reserve recently…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter25: Money, Banking, And The Federal Reserve System

Section: Chapter Questions

Problem 18P

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Question

Head of the US Federal Reserve recently decided to raise interest rates from 0.25% to 0.50%. Considering this information, please, answer the questions below wherever possible

b.How will this change affect USA money market in the short run?

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

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