If the Fed Changes the Federal Funds Rate

question 65

Multiple Choice

If the Fed changes the federal funds rate

• A)inflation is brought to an immediate halt
• B)the inflation rate increases for several months,but then begins to decreases
• C)major banks try to offset this change by lowering the interest rates they charge on loans
• D)major banks try to offset this change by lowering the interest rates they pay on savings deposits
• E)major banks raise the prime interest rate that they charge to their best customers

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Definitions:

Brym and Lie

Sociologists known for their contributions to the study of social dynamics and structures.

Hypothesis

A proposed explanation or assumption for a phenomenon, placed forward as a basis for further investigation or experimentation.

Theory

A coherent set of propositions formulated to explain a group of facts or phenomena, often tested through scientific methods.

Functionalism

A theoretical framework in sociology that emphasizes the interdependence of the parts of a society and their roles in maintaining social stability.