Question: Statements True False Countries with strong balance sheets and declining budget deficits tend to have lower interest rates. When the economy is weakening, the Fed

Statements

True

False

Countries with strong balance sheets and declining budget deficits tend to have lower interest rates.

When the economy is weakening, the Fed is likely to increase short-term interest rates.

During the credit crisis of 2008, investors around the world were fearful about the collapse of real estate markets, shaky stock markets, and illiquidity of several securities in the United States and several other nations. The demand for US Treasury bonds increased, which led to a rise in their price and a decline in their yields.

The Federal Reserve Board has a significant influence over the level of economic activity, inflation, interest rates in the United States.

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