Which of the following statements is correct? Multiple choice question. The interest rate earned on savings is set by the Federal Reserve. The interest rate paid on loans differs from the interest rate earned on savings. The interest rate paid on loans is the same as the interest rate earned on savings. The interest rate paid on loans is set by the Federal Reserve.

Question

Anu Bhardwaj · Accepted Answer

The correct answer is:

The interest rate paid on loans differs from the interest rate earned on savings.

Explanation:

The interest rate earned on savings is set by the Federal Reserve → Incorrect. The Fed influences overall interest rates, but banks and credit unions set their own savings rates.
The interest rate paid on loans differs from the interest rate earned on savings → Correct. Banks charge borrowers higher loan rates than the rates they pay depositors, and the difference is part of how they earn profit.
The interest rate paid on loans is the same as the interest rate earned on savings → Incorrect. Loan rates are always higher than savings rates.
The interest rate paid on loans is set by the Federal Reserve → Incorrect. The Fed sets benchmark rates (like the federal funds rate), but actual loan rates are determined by banks and lenders.

Economics

Economics

Anu Bhardwaj

Answer

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