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The federal reserve can cause unterest rates on mortgages to decrease by:

Answeres choices on image

The federal reserve can cause unterest rates on mortgages to decrease by: Answeres-example-1

2 Answers

5 votes

Answer:

C.lowering the discount rate on short term loans to banks.

Step-by-step explanation:

answered
User Cherrie
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8.7k points
2 votes

Answer:

The correct answer choice is A

Step-by-step explanation:

If the Fed buys large quantities of securities in the open market, it pays for those securities with newly created dollars. These dollars then increase the money supply in the economy, which increases the amount of loanable funds in the economy.

This in turn lowers all the interest rates accross the economy, including the rates on mortgages.

answered
User Fidd
by
8.4k points
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