Why has the Federal Reserve been raising interest rates? the Federal Reserve has been lowering interest rates, not raising them to control spending to destroy the real estate market to control inflation to support the real estate market Why has the Federal Reserve been raising interest rates? the Federal Reserve has been lowering interest rates, not raising them to control spending to destroy the real estate market to control inflation to support the real estate market
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Aparna S.
To work , use the information that during 2012 the inflation rate increased but remained in the "comfort zone" and the unemployment rate remained high. Why might the Fed decide to raise interest rates in this situation?
Say the Federal Reserve wanted to increase the money supply in order to lower interest rates in order to stimulate the economy so that unemployment will be reduced. What are the negative effects of this situation? Isn't it true that when interest rates are low, people are more likely to hold onto their money, which results in banks having a larger reserve? So even if the money supply increases, if people are less likely to spend money, it won't increase economic growth.
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