Apart from risk components, several macroeconomic factors—such
as Federal Reserve (the Fed) policy, federal budget deficit...
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Economics
Apart from risk components, several macroeconomic factors—such
as Federal Reserve (the Fed) policy, federal budget deficit or
surplus, international factors, and levels of business
activity—influence interest rates. Based on your understanding of
the impact of macroeconomic factors, identify which of the
following statements are true or false: Statements True False
Countries with strong balance sheets and declining budget deficits
tend to have lower interest rates. Actions that lower short-term
interest rates will always lower long-term interest rates. During
recessions, short-term interest rates decline more sharply than
long-term interest rates. When the economy is weakening, the Fed is
likely to decrease short-term interest rates.
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