While the Federal Reserve's Decision to Cut the Federal Funds

question 89

Multiple Choice

While the Federal Reserve's decision to cut the federal funds rate is expected to ________
Economic growth,its decision to raise the federal funds rate is expected to ________
Economic growth.

• A)speed up; slow down
• B)slow down; speed up
• C)have no effect on; speed up
• D)have no effect on; slow down

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Definitions:

Nominal Interest Rate

The stated or named interest rate on a loan or investment, not accounting for inflation or compounding effects.

Compounded Monthly

Interest that is calculated and added to the account balance every month.

Periodic Interest Rate

The interest rate charged or paid over a specific period of time, often monthly, quarterly, or annually.

Conditional Sale Contracts

Agreements where the sale of goods or property is conditional upon certain terms, typically the buyer making payments over a period, with the title remaining with the seller until conditions are met.