The increased foreign supply of loanable funds to U.S. credit markets stems in part from the Federal Reserve lowering the prime interest rate.

Question

Quizplus · Accepted Answer

The Federal Reserve lowering the prime interest rate primarily affects domestic monetary conditions and borrowing costs, while the increased foreign supply of loanable funds to U.S. credit markets is more directly influenced by global investors seeking higher returns or diversification, not directly by the Fed's adjustments to the prime rate.

The Increased Foreign Supply of Loanable Funds to U