If the Fed wants to fight inflation, it will ________ the federal funds rate, which in the short run shifts the ________.

Name: If the Fed wants to fight inflation, it will ________ the federal funds rate, which in the short run shifts the ________.
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Question

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Raising the federal funds rate makes borrowing more expensive, which tends to reduce spending and investment. This decrease in spending shifts the Aggregate Demand (AD) curve leftward, helping to reduce inflation.

If the Fed Wants to Fight Inflation, It Will ________