What would be a way for the Federal Reserve to slow down the economy when it is growing too quickly or is inflationary?
A) print more money
B) buy back government bonds on the open market
C) sell more government bonds
D) encourage the stock market

Question

Quizplus · Accepted Answer

To slow down the economy, the Federal Reserve can sell more government bonds, which would increase interest rates and make borrowing more expensive, thereby reducing consumer and business spending. Printing more money or encouraging the stock market would only fuel inflation and economic growth, making the situation worse. Buying back government bonds might have a short-term impact but would not be an effective long-term solution for managing inflation or economic growth.

What Would Be a Way for the Federal Reserve to Slow