A deficit trade balance hinders the Federal Reserve's ability to lower interest rates when combatting a recession.
Answer the following statement true (T) or false (F)
True
If the Federal Reserve attempts to lower interest rates in the United States, causing U.S. bond rates to fall below rates abroad, foreigners will sell U.S. bonds. This activity will depress bond prices and cause U.S. interest rates to increase. As a result, the existence of a deficit trade balance hinders the Fed's ability to combat a recession with lower interest rates. See 5-4: Other Factors That Influence Interest Rate Levels
You might also like to view...
Consider a three-year fixed-payment security that has a present value of $1,000. If the annual rate of discount is 7 percent, the payment made at the end of each year is
A. $70.00. B. $107.00. C. $142.86. D. $381.05.
When Tommy Hilfiger was an unknown brand, advertising announced his membership as a great U.S. designer by associating him with Geoffrey Beene, Stanley Blacker, Calvin Klein, and Perry Ellis, who were recognized members of that category
Tommy Hilfiger conveyed the brand's category membership by ________. A) relying on the product descriptor B) focusing on reliability C) comparing to exemplars D) announcing category benefits E) identifying counter examples
How should your online presence be viewed when applying for a job?
A) As supplemental information B) As private and immaterial to a potential employer C) As a career management tool D) As a replacement for the traditional résumé E) As a way to provide information the employer cannot legally ask about but still wants to know
Which item below is not a characteristic of investment clubs?
A) Small monthly dues, in the $25 range B) Reinvestment of dividends and capital gains C) Reliance upon stockbrokers for research and advice D) An opportunity for diversification