When inflation rises, the Federal Reserve will
A)act to decrease interest rates.
B)recommend that the Treasury raise interest rates.
C)recommend that Congress raise interest rates.
D)do nothing.
E)act to increase interest rates.

Question

Quizplus · Accepted Answer

When inflation rises, the Federal Reserve will usually act to increase interest rates in order to slow down spending and borrowing. This makes it more expensive to take out loans and can discourage people from making large purchases, which can help to reduce inflation.

When Inflation Rises, the Federal Reserve Will