Question

If The Fed reduces interest rates banks will make _____ (more or fewer) loans.

Answer 1

@Miracrown @Nnesha

Answer 2

i say more. read this article second paragraph http://www.foundationsforliving.org/articles/foundation/fedraiselower.html

Answer 3

@Compassionate what doyu think

Answer 4

@Zale101 ?

Answer 5

I would think that banks would do more loans to make up from the reduced rates from the government

Answer 6

ok thanks! wanted another opinion. if i have more questions like this can i ask you?

Answer 7

Sure thing.

Answer 8

and going with that it says

If The Fed reduces interest rates banks will make more loans. Then the money supply would ______ (increase or decrease?).

Answer 9

that one can be confusing cause more interest = more money but lower interest = more loans = less money but more people getting loans

Answer 10

reply when you got time

Answer 11

wait you said 'so if the fed reduce the interest rates bnks would most likely raise their interest rates'

i thought only the fed can raise these rates?

Answer 12

with the fed decreasing interest rates it wold make borrowing money easier and stuff

Answer 13

The banks control their prime rates on things such as car loans, mortgage rates, ect. Sorry if I'm loosing track here. Feds reduce interest bank loans will increase and money will be easier to be borrowed and since the interest is low they can be paid back in a timely manner that will make money for the banks. Sorry I had it backwards earlier.

Answer 14

so it would increase or still decrease?

Answer 15

and its ok

Answer 16

see i was thinking increase

Answer 17

Loans will increase and the supply of money will increase.

Answer 18

just to make things easier here is the chart I am filling out http://goo.gl/u8T80W I am writing an essay based off of this chart

and yeah that's understandable. so we have more, increase

Answer 19

and the next one I think it is 'get more loans'

Answer 20

Oh yeah that makes it a lot easier. Businesses will take out more loans, jobs will increase, as the economy speeds up inflation will increase

Answer 21

so pretty much it is 'more, increase, get loans, increase, more, increase'

Answer 22

because if the number of jobs increases, people would need to buy a car (if they do) to drive to work and with better jobs = better home if they need to move etc etc

Answer 23

Yeah that's what I'm thinking

Answer 24

thanks so much! i was needing to make sure i got the right info befre myessay