Federal Reserve Slashes Interest Rates to Zero The Fed is dropping its interest rate to zero percent.

The Fed wants to keep borrowing costs as low as possible as it sees the economy falling into recession. This announcement follows a previous interest rate cut less than two weeks ago.

a. Describe the process by which the Fed’s action in the news clip flows through the economy.

b. Draw a graph to illustrate the state of the economy that prompted the Fed to take the action described in the news clip.

c. Draw a graph to illustrate the Fed’s action and its effect.