If the Fed is concerned about a possible recession, it_{--------------------} the federal funds rate and, in response, long-term interest rates_{--------------------} by a_{--------------------} amount than the change in short-term rates. A)raises; increase; smaller B)raises; decrease; larger C)lowers; increase; smaller D)lowers; decrease; smaller E)raises; increase; larger

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Quizplus · Accepted Answer

If the Fed is concerned about a recession, it typically lowers the federal funds rate to stimulate economic activity. In response, long-term interest rates also tend to decrease, but usually by a smaller amount than the change in short-term rates due to factors like expectations and risk premiums.

If the Fed Is Concerned About a Possible Recession, It--------------------

If the Fed Is Concerned About a Possible Recession, It_{--------------------}