If the Federal Reserve Lowers the Federal Funds Rate

question 89

Multiple Choice

If the Federal Reserve lowers the Federal funds rate,

• A)other short-term interest rates fall.
• B)net exports decreases.
• C)other short-term interest rates rise.
• D)the price level falls.
• E)Both answers A and C are correct.

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Definitions:

Demand Curve

A graph showing the quantity of a good that consumers are willing and able to purchase at various prices.

Imposed Price

A price that is set by an external authority rather than by market forces of supply and demand.

Consumer-friendly

Describes goods, services, or policies that are designed with the welfare or satisfaction of consumers in mind.

Real Estate Market

The market segment encompassing the buying, selling, and leasing of property including land and buildings.