Apart from risk components, several macroeconomic factors$$such as Federal Reserve $($the Fed$)$ policy, federal budget deficit or surplus, international factors, and levels of business activity$$influence interest rates.

Based on your understanding of the impact of macroeconomic factors, identify which of the following statements are true or false:

Statements

True

False

The larger the federal deficit, other things held constant, the higher are interest rates.

Actions that lower short$-$term interest rates will always lower long$-$term interest rates.

Long$-$term interest rates are not as sensitive to booms and recessions as are short$-$term interest rates.

The Federal Reserve Board has a significant influence over the level of economic activity, inflation, interest rates in the United States.