One of the major ways the Fed influences economic conditions is through its control of interest rates.
Level of Learning 1: Knowledge of key terms

Question

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The statement is true, as the Fed sets the federal funds rate, which is the interest rate at which banks borrow and lend funds overnight, and this rate has an impact on other interest rates in the economy, such as mortgage rates and credit card rates. By adjusting the federal funds rate, the Fed can influence the cost of borrowing and spending in the economy, which in turn affects economic activity and inflation.

One of the Major Ways the Fed Influences Economic Conditions