Question: In order to manipulate the inflation rate in the United States, the Federal Reserve raises the discount rate. What will occur as a result? Select ALL that apply. Group of answer choices Banks will increase interest rates on loans to each other. Banks will lower interest rates on loans to each other. The amount of liquid currency in the economy will decrease. The amount of liquid currency in the economy will increase. The inflation rate of the US dollar will decrease. The inflation rate of the US dollar will increase.
Question: In order to manipulate the inflation rate in the United States, the Federal Reserve raises the discount rate. What will occur as a result? Select ALL that apply. Group of answer choices Banks will increase interest rates on loans to each other. Banks will lower interest rates on loans to each other. The amount of liquid currency in the economy will decrease. The amount of liquid currency in the economy will increase. The inflation rate of the US dollar will decrease. The inflation rate of the US dollar will increase.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter24: The Influence Of Monetary And Fiscal Policy On Aggregate Demand
Section: Chapter Questions
Problem 1CQQ
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In order to manipulate the inflation rate in the United States, the Federal Reserve lowers the federal funds rate. What will occur as a result? Select all that apply.
Transcribed Image Text:Question: In order to manipulate the
inflation rate in the United States, the
Federal Reserve raises the discount rate.
What will occur as a result?
Select ALL that apply.
Group of answer choices
Banks will increase interest rates on loans
to each other.
Banks will lower interest rates on loans to
each other.
The amount of liquid currency in the
economy will decrease.
The amount of liquid currency in the
economy will increase.
The inflation rate of the US dollar will
decrease.
The inflation rate of the US dollar will
increase.
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