Federal Reserve increases in the Federal Funds rate in 2005 had little immediate impact upon the overheated housing market because
A. the yield curve became more steeply upward-sloping.
B. long-term interest rates and short-term interest rates do not always move in lockstep.
C. long-term interest increased as short-term interest rates increased.
D. all of the options are correct.
Answer: B
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A legal ceiling set below the market-clearing interest rate would tend to
A) create a surplus of loans. B) create a shortage of loans. C) increase the demand for loans. D) decrease the supply of loans. E) do none of the above.
If a dollar today will likely have more purchasing power because of inflation, then a dollar a year from now ________ a dollar today
A) will be more valuable than B) will have the same value as C) will be less valuable than D) may be more valuable or less valuable than