How does the Federal rate affect mortgage rates?

Q: Is everybody worse off when interest rates rise?

A: The interest rate is the rate charged by the lender on the asset lend by them. The asset lend can be…

Q: What problems will the federal reserve face if people are unemployed and facing inflation?

A: Inflation is defined as the rise in the average price level of commodities and services in the…

Q: should banks have the right to assign a mortgage to a third party?

A: Answer in step 2.

Q: why do government keep banks small?

A: In economics, we study how scarce resources are used by decision-makers to satisfy the unlimited…

Q: If government spending were increased, what would occur to interest rates

A: Government spending refers to the money spent by the government on things like health care,…

Q: what is credit or default spread?

A: The yield on Bonds: Yield is the income generated from the buying of bonds. For example, a…

Q: What is the difference between Market and Inflation-Free Interest Rates?

A: Market and inflation free interest rate are entirely different concepts. Market is the place that…

Q: Draw a graph of a typical Real and Nominal Interest Rates (Three-Month Treasury Bills), and discuss…

A: Introduction: The nominal interest rate is the share increase in cash you pay the loaner for…

Q: what is the formula for the rate on long-term Treasury bonds?

A: Suppose:Amount paid for bond=$10,000Face value=$15,000Counpon rate=$2000

Q: What is the most important way for an economy to recover from an economic crisis caused by credit…

A: Credit denotes a loan, while credit growth denotes the taking of more loans. Credit expansion is the…

Q: Would it be advantageous to borrow money if you expected prices to rise?  Would you want a…

A: Inflation is change in the overall price level of the economy. Generally, interest rates for loans,…

Q: Why do poor people lack access to financial services?

A: In developing countries, most of the poor or underprivileged people lack proper access to financial…

Q: If the interest rate is 8%, how much households and firms will want to borrow?

A: The households and firms that want to borrow imply the demand for funds in the market. Thus we will…

Q: what is the purpose of the national credit act

A: In a market, various acts are implements to protect the interest of the market participants. The…

Q: What are the two factors that determine what borrowing will cost?

A: Two factors that determine what borrowing will cost are -  Principal Amount : It is the original…

Q: Why do you and I care what the Federal Reserve does?”

A: Functions of the Federal Reserve: The Fed conducts the monetary policy for the nation It provides…

Q: Why do the creditors generally charge higher interest rates on new borrowing?

A: The interest rate is the amount that the creditor charges with the principal from the borrower to…

Q: Suppose the government starts running budget deficits without raising taxes or printing money. What…

A: 1. When the government start running budget deficit without raising the taxes, it will make them to…

Q: Why does the Fed want to avoid an “overheating” economy?

A: Overheating of the economy is indicating the peak situation in the business cycle. Economy is doing…

Q: What is a balance sheet? What is net worth?

A: Balance sheet and net worth are part of financial analysis and accounting.

Q: How does changing the inflation rate affect the required quarterly savings plan?

A: The increase in the price level of goods and services is known as the situation of inflation. This…

Q: Interest rates: why are interest rates increasing on student loans or mortgages?

A: Secured Loan:- A secured loan is one that is supported by secured financial assets owned by the…

Q: How do you think Greenwood bank can help black and brown communities financially ?

A: Banks: A bank is a monetary foundation that acknowledges stores from people in general and…

Q: Distinguish between Market and Inflation-Free Interest Rates?

A: The Market interest Rate, also called the nominal interest rate (i) is the rate which is not…

Q: How would you determine the interest rate that the bank charges on the transaction?

A: Many payments are made through our bank accounts and each transaction has a cost attached to it. The…

Q: When consumers and businesses have greater confidence that they will be able to repay loans

A: Loan repayment is defined as the act paying back the loan. This loan repayment occurs through a…

Q: What is FDI?

A: Foreign Direct Investment is the abbreviation of FDI. It is different from FPI and is included in…

Q: Name any two quantitative tool to control credit creation in an economy

A: The measures which manipulates the overall volume of the credit flow in an economy are term to be as…

Q: Should governments pay off their debts and not be allowed to borrow any more except under special…

A: money borrowed by the government generally to provide public services: The government intends to use…

Q: What would happen if suddenly banks stop lending (this has happened in the past)? Can it grow?

A: When one or more individuals, businesses, or other entities lend money to additional individuals,…

Q: How did the securitisation of mortgages and the targeting of sub-prime borrowers contribute to the…

A: Mortgages to high-risk borrowers were expanded, and home prices rose, contributing to a period of…

Q: Since the 2008 financial crisis, borrowing at the federal funds rate

A: We have to find since 2008 financial crises .

Q: If a government gains from unexpected inflation when it borrows, why would it choose to offer…

A: Government of a country generally chooses to offer indexed bonds when there are unexpected gains…

Q: What does inflation do to the value of money? *

A: Definition of Inflation- Inflation is defined as the rise in the general price level in the…

Q: Do you think that it is fair that you pay into Social Security but some economists predict that it…

A: The Federal Insurance Contributions Act (FICA) levy, a dedicated payroll tax, is used to fund the…