The Federal Reserve is responsible for managing the country’s money supply. Monetary policy affects the whole economy through interest rates. When the Fed increases the money supply, interest rates drop. When the Fed decreases the money supply, interest rates increase. This week you will discuss how you are affected by the Federal Reserve’s monetary policies. In your discussion, please consider the following questions or statements.
2. Thinking deeper about your answers; how do interest rates affect millions of other buyers and their decisions, then how that affects the whole economy? Explain.
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