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Smart Reasoning:

C&E

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Qaagi - Book of Why

Causes

Effects

the Fed will ease credittriggeringa drop in the federal funds rate

the FOMC(passive) is set byA decrease in the federal funds rate

an increase in excess reserveswould leadto reduction in the federal funds rate

the Fed to act forcefullyto preventit , by lowering the federal funds rate

other policieswill causethe federal funds rate to decrease

That increase in the supply of available reservescausesthe federal funds rate to decrease

A decrease in the discount ratewill ... causea decrease in the federal funds rate

monetary policy(passive) is caused byfederal funds rate reduction

Smith argueswill be setoff by increasing the federal funds rate

to keep the economy balanced while minimizing speculation in the markets(passive) are designedIncreases in the federal funds rate

to an interest rate decrease for borrowerswill leadto an interest rate decrease for borrowers

to a drop in the rates offered on savings accountscould leadto a drop in the rates offered on savings accounts

the direction of the U.S. economy toward strong employment and stable inflationto influencethe direction of the U.S. economy toward strong employment and stable inflation

the rate of return on fixed income investments to diminish significantlyto causethe rate of return on fixed income investments to diminish significantly

to higher long - term ratesleadto higher long - term rates

lower mortgage rateswould triggerlower mortgage rates

to the decrease in the short - term interest rates , which promotes consumer spendingleadsto the decrease in the short - term interest rates , which promotes consumer spending

in a surge of imprudent investments and loanswould resultin a surge of imprudent investments and loans

long - term interest rates(passive) caused bylong - term interest rates

along with consumers ’ increasing reliance on credit cards to fund expenditureswould resultalong with consumers ’ increasing reliance on credit cards to fund expenditures

to an increase in mortgage ratesdid leadto an increase in mortgage rates

the price of creditto influencethe price of credit

to increases in ordinary investors ’ savings - account ratesleadsto increases in ordinary investors ’ savings - account rates

to a decline in the P / E ratio through an increase in the required rate of returnwould leadto a decline in the P / E ratio through an increase in the required rate of return

the exchange rate to depreciate ... which causes net exports to increasewill causethe exchange rate to depreciate ... which causes net exports to increase

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Smart Reasoning:

C&E

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