If the Fed is concerned with inflation it will ____________the federal funds rate in order to____________ aggregate demand.

Question

Quizplus · Accepted Answer

When the Fed is concerned with inflation, it will raise the federal funds rate in order to decrease aggregate demand. By raising interest rates, borrowing becomes more expensive, making it more difficult for consumers and businesses to spend and invest. This decrease in spending will ultimately decrease demand and help to stabilize prices.

If the Fed Is Concerned with Inflation It Will ____________The