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which of the following changes is observed when the Fed increases the federal funds rate?...

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Finance

which of the following changes is observed when the Fed increases the federal funds rate?

  1. Major banks try to offset this change by lowering the interest rates they charge on loans.

  2. Major banks try to offset this change by lowering the interest rates they pay on savings deposits.

  3. The inflation rate increases for several months, but then begins to decrease.

  4. Major banks raise the prime interest rate that they charge to their best customers.

  5. Inflation is brought to an immediate halt

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