When the economy is developing an inflationary gap, the Fed should increase the money supply to decrease interest rates.

Name: When the economy is developing an inflationary gap, the Fed should increase the money supply to decrease interest rates.
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When the economy is developing an inflationary gap, the Fed should decrease the money supply to increase interest rates and reduce aggregate demand, which helps to decrease inflationary pressure.

When the Economy Is Developing an Inflationary Gap, the Fed