Question: Explain the difference between the CB's policy rate and the borrowing rate. Which one matters for spending activities and why. What are the implications of

Explain the difference between the CB's policy rate and the borrowing rate. Which one matters for spending activities and why. What are the implications of this in spending decisions?

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Answer Central banks such as the Federal Reserve in the United States or the European Central Bank in the Eurozone use monetary policy tools to influence the economy Two key interest rates associated ... View full answer

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