Discover answers to your most pressing questions at Westonci.ca, the ultimate Q&A platform that connects you with expert solutions. Join our platform to connect with experts ready to provide accurate answers to your questions in various fields. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A platform.
Sagot :
Terms in this set (10) A decrease in the Discount Rate is an indication that monetary policy is contractionary. False.
A decline in the Discount Rate signals that the Fed wants to loosen monetary policy and send a signal to banks that they would like banks to increase their lending activity.
What happens when the Fed lowers the discount rate?
When the Fed lowers the discount rate, this increases excess reserves in commercial banks throughout the economy and expands the money supply.
On the other hand, when the Fed raises the discount rate, this decreases excess reserves in commercial banks and contracts the money supply
When the Fed reduces the discount rate banks will have to obtain funds at a higher cost?
In the context of monetary policy, when the Fed reduces the discount rate, banks will have to obtain funds at a higher cost.
Deflation refers to a period of falling average prices across an economy, which is a sign of economic trouble that goes hand-in-hand with very high unemployment.
Learn more about this here:
https://brainly.com/question/15363247
#SPJ4
Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Westonci.ca is here to provide the answers you seek. Return often for more expert solutions.
