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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

100%

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.

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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