Which of the following statements is FALSE?
A) The interest rates that banks offer on investments or charge on loans depend on the horizon of the investment or loan.
B) The Federal Reserve determines very short-term interest rates through its influence on the federal funds rate.
C) The interest rates that are quoted by banks and other financial institutions are nominal interest rates.
D) Fundamentally, interest rates are determined by the Federal Reserve.

Question

Quizplus · Accepted Answer

While the Federal Reserve has an influence on interest rates, interest rates are not fundamentally determined by the Federal Reserve alone. Rather, interest rates are influenced by a variety of factors, including market forces, inflation expectations, and global economic conditions.

Which of the Following Statements Is FALSE