Although the Federal Reserve's decision to cut the federal funds rate is expected to ________ economic growth, its decision to raise the federal funds rate is expected to
________ economic growth.

Question

Quizplus · Accepted Answer

When the Federal Reserve cuts the federal funds rate, it makes borrowing cheaper and increases the amount of money in circulation, which in turn stimulates economic growth. Conversely, when the Federal Reserve raises the federal funds rate, it makes borrowing more expensive and reduces the amount of money in circulation, which can slow down economic growth.

Although the Federal Reserve's Decision to Cut the Federal Funds