Interest rate fluctuations
A)are usually not considered to be of much importance and are largely ignored by the Fed.
B)have the paradoxical effect of increasing the rate of economic growth.
C)make it difficult for households and firms to plan for the future.
D)have largely been eliminated by the Fed during the past two decades.

Question

Quizplus · Accepted Answer

Interest rate fluctuations can make it difficult for households and firms to plan for the future. This uncertainty can impact spending and investment decisions, which can ultimately affect economic growth. The Fed pays close attention to interest rate fluctuations and often adjusts monetary policy in response. Therefore, option A and D are not correct. Option B is also not correct as interest rate fluctuations can have both positive and negative effects on economic growth depending on the overall economic conditions.

Interest Rate Fluctuations