Question

In this scenario, what is the Fed trying to do by increasing interest rates? Check all that apply. decrease the amount of money that banks have to lend increase the money supply for banks reduce the amount of available credit discourage consumer borrowing by increasing interest rates on loans encourage banks to loan more money

Answer 1

Explanation:

There are certain effects of raising interest rates.  

Higher interest rates tend to moderate economic growth. As the cost of borrowing increases, this leads to reduce disposable income and therefore limit the growth in consumer spending. Higher interest rates tend to reduce the rate of economic growth and inflationary pressures

Among the given statements in question, following are true;

decrease the amount of money that banks have to lend  

discourage consumer borrowing by increasing interest rates on loans  

encourage banks to loan more money

Answer 2

Over the last several months, there has been a rapid increase in the number of loans that banks have provided for mortgages and small businesses. This change has raised concerns for the Fed. Today, the Fed has announced an increase in the interest rates that it is charging banks. In this scenario, what is the Fed trying to do by increasing interest rates? Check all that apply.

(a) decrease the amount of money that banks have to lend

(c) reduce the amount of available credit

(d) discourage consumer borrowing by increasing interest rates on loans

Explanation:

• Central banks use different strategies to increase or raising the banking system's liquidity amount (that is, amount of money). That is what monetary policy is known as.
• The Fed can lower the reserve requirements for banks, thereby increasing the money supply and allowing banks to lend more money
• Alternatively, the Fed will reduce the amount of the money supply by increasing reserve requirements of the banks.

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Fed monetary policy effectiveness during banking crisis - Brainly.in

https://brainly.in/question/14537292