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Social Studies, 24.11.2021 14:00 leo4687

Raising the federal funds rate decreases inflation because raising the federal funds rate increases the interest rates that banks charge each other for loans. Therefore, banks are less likely to take out loans to replenish their reserves. To keep their reserves at the required ratio, banks will lend less money.

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Raising the federal funds rate decreases inflation because raising the federal funds rate increases...

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