Which one of these events is MOST likely to raise interest rates in the economy? Select...
Which one of these events is MOST likely to raise interest rates in the economy?
Select one:
a. The Fed buying government bonds through an Open Market Operation
b. Prices in the economy falling during an economic depression
c. The Fed lowering the Federal Funds Rate
d. The Fed raising the Required Reserves Ratio
e. National income falling during a recession
Homework Answers
Ans. d. The fed raising the required reserves ratio
when federal reserves bank raising the required reserve ratio which implies that every bank needs to hold more deposits as reserves and it causes that less amount will be available for loan to the public and lower money supply in the economy that leads to raising interest rates in the economy.
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Which one of these events is MOST likely to raise interest rates
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