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banks loan LESS ► people spend LESS ► firms hire LESS ► people spend LESS
interest rates
The Fed
economy grows
interest
raise interest rates
Reserve
True
economy shrinks
What mechanism does The Fed use to loan money to banks?
interest rates
The Fed
economy grows
interest
raise interest rates
Reserve
True
economy shrinks
amount money grows over time (mainly earned via loaning or saving)
interest rates
The Fed
economy grows
interest
raise interest rates
Reserve
True
economy shrinks
Who loans the money to banks?
interest rates
The Fed
economy grows
interest
raise interest rates
Reserve
True
economy shrinks
How does The Fed restrict the supply of money in the economy?
interest rates
The Fed
economy grows
interest
raise interest rates
Reserve
True
economy shrinks
banks loan MORE ► people spend MORE ► firms hire MORE ► people spend MORE .....which of the following will NOT occur
interest rates
The Fed
economy grows
interest
raise interest rates
Reserve
True
economy shrinks
Germany in the 1920s and modern nations in Africa have experienced hyper inflation.
interest rates
The Fed
economy grows
interest
raise interest rates
Reserve
True
economy shrinks
amount of money the bank must keep in its vaults
interest rates
The Fed
economy grows
interest
raise interest rates
Reserve
True
economy shrinks
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