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8. Macroeconomic factors that Apart from risk components, several macroeconomic factors-such as Federal Reserve (the Fed) policy, federal budget deficit or surplus, international factors, and levels of business activity-influence interest rates. Based on your understanding of the impact of macroeconomic factors, identify which of the following statements are true or false: Statements True False The larger the federal deficit, other things held constant, the higher are interest rates. O When the economy is weakening, the Fed is likely to increase short-term interest rates. O O Long-term interest rates are not as sensitive to booms and recessions as are short-term interest rates. O When the economy is weakening, the Fed is likely to decrease short-term interest rates. O O

8. Macroeconomic factors that Apart from risk components, several macroeconomic factors-such as Federal Reserve (the Fed) policy, federal budget deficit or surplus, international factors, and levels of business activity-influence interest rates. Based on your understanding of the impact of macroeconomic factors, identify which of the following statements are true or false: Statements True False The larger the federal deficit, other things held constant, the higher are interest rates. O When the economy is weakening, the Fed is likely to increase short-term interest rates. O O Long-term interest rates are not as sensitive to booms and recessions as are short-term interest rates. O When the economy is weakening, the Fed is likely to decrease short-term interest rates. O O

Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
8th Edition
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter36: Six Debates Over Macroeconomic Policy
Section: Chapter Questions
Problem 3PA
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8. Macroeconomic factors that Apart from risk components, several macroeconomic factors-such as Federal Reserve (the Fed) policy, federal budget deficit or surplus, international factors, and levels of business activity-influence interest rates. Based on your understanding of the impact of macroeconomic factors, identify which of the following statements are true or false: Statements True False The larger the federal deficit, other things held constant, the higher are interest rates. O When the economy is weakening, the Fed is likely to increase short-term interest rates. O O Long-term interest rates are not as sensitive to booms and recessions as are short-term interest rates. O When the economy is weakening, the Fed is likely to decrease short-term interest rates. O O
Transcribed Image Text:8. Macroeconomic factors that Apart from risk components, several macroeconomic factors-such as Federal Reserve (the Fed) policy, federal budget deficit or surplus, international factors, and levels of business activity-influence interest rates. Based on your understanding of the impact of macroeconomic factors, identify which of the following statements are true or false: Statements True False The larger the federal deficit, other things held constant, the higher are interest rates. O When the economy is weakening, the Fed is likely to increase short-term interest rates. O O Long-term interest rates are not as sensitive to booms and recessions as are short-term interest rates. O When the economy is weakening, the Fed is likely to decrease short-term interest rates. O O
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