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Business borrowing becomes more difficult when the _____.
A) federal government reduces taxes
B) federal government increases spending
C) Federal Reserve decreases the money supply
D) Federal Reserve reduces interest rates
Federal Reserve
The central banking system of the United States, responsible for regulating the nation's monetary policy and overseeing the banking system.
Business Borrowing
The act of obtaining funds from lenders or financial institutions by businesses to finance operations, growth, or investments.
Decreases the Money Supply
A monetary policy action that reduces the total amount of money available in the banking system, often aiming to control inflation.
- Understand the influence and purpose of governmental measures on economic operations, emphasizing fiscal and monetary strategies, alongside their consequences on unemployment and inflation rates.
- Recognize the functions and impact of the Federal Reserve System on the U.S. economy.
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Learning Objectives
- Understand the influence and purpose of governmental measures on economic operations, emphasizing fiscal and monetary strategies, alongside their consequences on unemployment and inflation rates.
- Recognize the functions and impact of the Federal Reserve System on the U.S. economy.
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