Decides to increase the federal funds rate

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Reference no: EM131450011

1. Suppose that the Fed is concerned about inflation and decides to increase the federal funds rate by 50 basis points. How will they accomplish this?

2. How does financial intermediation often provide a better alternative to direct financing between surplus and deficit units?

3. Explain how the Fed lowers and raises the federal funds rate.

4. Interest rates are rising. Explain how this would impact a negatively interest-rate spread financial institution.

5. The Federal Reserve is concerned about an ensuing recession; what will they most likely do and how will they accomplish this?

6. What would happen to the standard of living if financial institutions did not exist? Why?

Reference no: EM131450011

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