If the Federal Reserve Board needed to curb inflation,it would most likely __________.

Question

Quizplus · Accepted Answer

To curb inflation, the Federal Reserve Board would most likely raise interest rates. By raising interest rates, borrowing becomes more expensive which reduces spending and encourages saving. This decrease in spending helps to slow down the economy and ultimately reduces inflation. Lowering interest rates would have the opposite effect and stimulate borrowing and spending which would further increase inflation. Lowering taxes and increasing government spending could also potentially increase inflation rather than curbing it.

If the Federal Reserve Board Needed to Curb Inflation,it Would