bank interest rates usually go up?

Question

A.before the goverment interest rate goes up
B.after the goverment interest rate goes up
C.when banks have alot of customers
D.before there is a deficit

Answer 1

B. after the government interest rate goes up

It is part of the contractionary monetary policy used by the government to reduce the ampunt of money in the economy. It will only be useful when the banks have less excess reserves to lend people or for people to get back their deposits. These banks, when have less excess reserves, will have to borrow from the government (or the central bank). When the government interest rates goes up, their borrowing cost will rise and therefore, leading to soaring bank interest rate.

Answer 2

b. If you mean Federal Funds Rate as the government interest rate, then that's the answer. The Federal Funds Rate is the rate that the Federal Reserve uses to keep the economy under control from such threats as inflation.

Answer 3

B.
When fed. raise rate usually bank rates rise'

Answer 4

b.it always depend on government policy