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Business
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| Number of pages / Number of words: |
2 / 489 |
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This reduces the amount of money available to the federal funds market. This results in an increase in the federal funds rate. Since federal funds rate increases, commercial banks have less money to loan. So now, the prime rate increases, which discourages individuals from borrowing money and the overall spending decreases...
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This results in an increase in the federal funds rate. Since federal funds rate increases, commercial banks have less money to loan. So now, the prime rate increases, which discourages individuals from borrowing money and the overall spending decreases. When spending decreases, demand for goods drops...
Essay fragment
General points of the essay
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Paul Volcker
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