This is a graph showing the Federal Funds Rate and the prime bank loan rate since the beginning of 2022. The prime bank rate is the starting rate charged to borrowers for loans like car loans, student loans, and mortgages. FRED Percent 8 7 6 5 4 3 2 1 0 - Federal Funds Effective Rate - Bank Prime Loan Rate 2022-02 2022-03 2022-04 2022-05 2022-06 2022-07 2022-08 2022-09 2022-10 1. Describe the relationship between the federal funds rate and the prime loan rate. 2. What is the starting value of the federal funds rate in this graph? 3. What is the current value of the federal funds rate? 4. What is the current value of the prime loan rate?

This is a graph showing the Federal Funds Rate and the prime bank loan rate since the beginning of 2022. The prime bank rate is the starting rate charged to borrowers for loans like car loans, student loans, and mortgages. FRED Percent 8 7 6 5 4 3 2 1 0 - Federal Funds Effective Rate - Bank Prime Loan Rate 2022-02 2022-03 2022-04 2022-05 2022-06 2022-07 2022-08 2022-09 2022-10 1. Describe the relationship between the federal funds rate and the prime loan rate. 2. What is the starting value of the federal funds rate in this graph? 3. What is the current value of the federal funds rate? 4. What is the current value of the prime loan rate?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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To understand the important role played by banks in the economy, we need to imagine a world without banks. REQUIRED: A. Explain how economic transactions between household savers of funds and corporate users of funds would occur in a world without financial intermediaries. Identify and explain three economic disincentives that probably would dampen the flow of funds between household savers of funds and corporate users of funds in an economic world without financial intermediaries. Identify and explain the two functions in which FIs may specialize that would enable the smooth flow of funds from household savers to corporate users. In what sense are the financial claims of FIs considered secondary securities, while the financial claims of commercial corporations are considered primary securities?
Figure 15-1 Interest Rate 4% 3% 2% MS b d Money Demand Quantity of Money Refer to the Figure 15-1. At an interest rate of 4 percent, how much is the excess money demand or supply? There is an excess money supply equal to the distance between b and a. There is an excess money demand equal to the distance between a and b. There is an excess money demand equal to the distance between b and c. There is an excess money supply equal to the distance between c and b.
In the 2000s savings and loans institutions significantly increased the number of subprime mortgages they offered. Note: subprime mortgages are loans to people who have not-so-good credit and/or ability to make loan payments for home purchases. After the 2008-09 recession they became much less common. why subprime mortgages are or are not good for the country and the individuals who take these mortgages? What are the positive and negative effects?
Use the following information for all of the questions in this Check Point: Y $14 trillion C= $8 trillion | = $3 trillion TR = $1 trillion T= $3 trillion Enter your answers as whole numbers only (no decimals, no $). For example, if the answer is $7 trillion, you would only enter 7 as your a Question 1 What would government purchases be equal to? $ trillion. Question 2 What would private saving be equal to? $ trillion. Question 3 What would public saving be equal to? $ trillion.
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