By raising and lowering the interest rates at which private banks borrow money from the government,the Federal Reserve Bank:

Question

Quizplus · Accepted Answer

The Federal Reserve Bank uses interest rates to influence the actions of private banks, which in turn affects the amount of money in circulation in the economy. Thus, the Federal Reserve Bank can directly impact the size of the nation's money supply (A). Additionally, interest rates can influence foreign investment in US markets, which can affect the value of the dollar (B). There is no evidence that the Federal Reserve Bank's actions minimize investor confidence about the nation's future (C). Therefore, D is the correct answer.

By Raising and Lowering the Interest Rates at Which Private