Question

4) In 1 or 2 sentences, describe the trend (or general direction) in the interest rates between November 1, 2007, and October 29, 2008, by answering the following questions: Are the interest rates increasing or decreasing? Does the trend indicate that the Federal Reserve is increasing or decreasing the growth of the money supply during this time?

Answer 1

According to the chart below the interest rates are decreasing from 7.50% in 2007 to 4.00% in 2008.

Date of Rate Change Rate(%)

October 31, 2007 7.50

December 11, 2007 7.25

January 22, 2008 6.50

January 30, 2008 6.00

March 18, 2008 5.25

April 30, 2008 5.00

October 8, 2008 4.50

October 29, 2008 4.00

The Federal reserve is increasing the money supply.