If inflation is a threat, then the Fed will conduct monetary policy aimed at _______ the interest rate which then will shift aggregate demand to the _______.

Name: If inflation is a threat, then the Fed will conduct monetary policy aimed at _______ the interest rate which then will shift aggregate demand to the _______.
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Question

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To combat inflation, the Fed typically raises interest rates, which tends to decrease borrowing and spending, thus shifting aggregate demand to the left.

If Inflation Is a Threat, Then the Fed Will Conduct