Question

When the Fed raises rates, is this a good sign for businesses?
(1 point)
No, it lowers purchasing power.
Yes, any increase is great news.
Yes, it means inflation is very low.
No, existing loans will have higher rates.
A)
Why is it the Fed’s responsibility to set interest rates, not national banks?
(1 point)
The Fed is responsible for printing all money.
There are not very many national banks, so few are qualified.
The Fed consults national banks, but they do not make the final decisions.
National banks are for profit, so they are not looking at the overall economy

Answer 1

Q1 answer: No — existing loans will have higher rates.
Explanation: When the Fed raises rates borrowing costs rise (especially on variable-rate debt), which tends to hurt businesses and can reduce demand.

Q2 answer: National banks are for profit, so they are not looking at the overall economy.
Explanation: The Fed is the U.S. central bank charged with monetary policy and macroeconomic goals (stable prices, maximum employment). Commercial (national) banks are private, profit‑driven institutions and do not set economy‑wide policy.