Apart from risk components, several macroeconomic factors-such as Federal Reserv

Question

Apart from risk components, several macroeconomic factors-such as Federal Reserve (the Fed) policy, federal budget deficit or surplus, international factors, and levels of business activity-influence interest rates. Based on your understanding of the impact of macroeconomic factors, identify which of the following statements are true or false: Statements True False When the Fed increases the money supply, short-term interest rates tend to decline. During the credit crisis of 2008, investors around the world were fearful about the collapse of O real estate markets, shaky stock markets, and illiquidity of several securities in the United States and several other nations. The demand for U.S. Treasury bonds increased, which led to a rise in their price and a decline in their yields. If the Fed injects a huge amount of money into the markets, inflation is expected to decline, and long-term interest rates are expected to rise. The Federal Reserve Board has a significant influence over the level of economic activity, inflation, interest rates in the United States.

Explanation / Answer

1.
THe statement is True
2.
THe statement is True
3.
THe statement is True
4.
THe statement is True

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