It is clear that the Fed can affect short-term interest rates by changing the money supply. Can it also affect long-term interest rates? That is, if it can affect the interest rate on a one-year security can it also affect the interest rate on a two-year security? If so, explain your reasoning.

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The Answer of It is clear that the Fed can affect short-term interest rates by changing the money supply. Can it also affect long-term interest rates? That is, if it can affect the interest rate on a one-year security can it also affect the interest rate on a two-year security? If so, explain your reasoning.

It Is Clear That the Fed Can Affect Short-Term Interest