If the Fed Increases the Federal Funds Rate

Multiple Choice

If the Fed increases the federal funds rate

A) inflation is brought to an immediate halt
B) the inflation rate increases for several months, but then begins to decreases
C) major banks try to offset this change by lowering the interest rates they charge on loans
D) major banks try to offset this change by lowering the interest rates they pay on savings deposits
E) major banks raise the prime interest rate that they charge to their best customers