Concept
What effect do higher interest rates have on the U.S. economy?
IntroductionToBusiness OP 8D04gAa / 15.3. U.S. Financial Institutions*
"Exhibit 15.4 The Federal Reserve kept short-term interest rates close to 0 percent for more than seven years, from 2009 to December 2015, as a result of the global financial crisis. Now that the economy seems to be recovering at a slow but steady pace, the Fed began to raise the interest rate to 1.00–1.25 percent in mid-2017. What effect do higher interest rates have on the U.S. economy? (Credit: ./ Pexels/ CC0 License/ ✓ Free for personal and commercial use/ ✓ No attribution required) C O N C E P T C H E C K 1. What are the four key functions of the Federal Reserve System? 2. What three tools does the Federal Reserve System use to manage the money supply, and how does each affect economic activity? 3. What was the Fed’s role in keeping the U.S. financial markets solvent during the 2007–2009 financial crisis?"
Related Ideas
- How does monetary policy influence economic activity and inflation?IntroductionToBusiness OP 8D04gAa · 1.5. Achieving Macroeconomic Goals*
- How does the Federal Reserve manage the money supply?IntroductionToBusiness OP 8D04gAa · 15.2. The Federal Reserve System*
- How does the Federal Reserve manage the money supply?IntroductionToBusiness OP 8D04gAa · Preparing for Tomorrow's Workplace Skills
- How did the Federal Reserve respond to the 2007–2009 financial crisis?IntroductionToBusiness OP 8D04gAa · 15.2. The Federal Reserve System*
- How does the Federal Reserve regulate credit and support payments?IntroductionToBusiness OP 8D04gAa · 15.2. The Federal Reserve System*
- What is the Federal Reserve System and why was it created?IntroductionToBusiness OP 8D04gAa · 15.2. The Federal Reserve System*
- What is the Federal Reserve System and how does it influence the economy?IntroductionToBusiness OP 8D04gAa · Summary of Learning Outcomes
- How does the Federal Reserve influence the money supply and credit?IntroductionToBusiness OP 8D04gAa · Glossary