What is a good historical example of when the Fed created a recession to reduce inflation expectations?
A) In the early 1980s
B) In the early 1960s
C) During the Great Depression
D) In the late 1920s
E) During World War II.

Question

Quizplus · Accepted Answer

In the early 1980s, the Federal Reserve under Chairman Paul Volcker raised interest rates to an unprecedented level in an effort to reduce inflation expectations. This led to a severe recession, but also brought down inflation from double-digit levels to more manageable levels in the long run.

What Is a Good Historical Example of When the Fed