g If the Fed is concerned about a possible recession, it the federal funds rate and, in response, longterm interest rates by a amount than the change in shortterm rates. A. lowers; increase; smaller B. lowers; decrease; smaller C. raises; decrease; larger D. raises; increase; smaller E. raises; increase; larger

The Fed

Concern about possible recession:

E. raises; increase; larger

Explanation:

The federal funds rate is a short-term monetary policy tool that the Federal Reserve deploys to control expansionary or recessionary economic conditions.  It is the interest rate that Federal Reserve allows banks with excess to charge other banks that need to borrow to shore up their deficits.  This interest rate is a short-term rate when compared to the long-term interest rates that banks charge consumers of its products and services.  The long-term interest rates are affected by the inflation rates.  

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