If the Fed believes that inflation is a problem,it will (select one):
A)take actions to reduce interest rates
B)bring about an increase in interest rates
C)do nothing because it believes the government should try to regulate the economy
D)increase its level of spending

Question

Quizplus · Accepted Answer

When the Federal Reserve believes that inflation is a problem, it typically takes action to increase interest rates. Higher interest rates can help to cool off an overheating economy by making borrowing more expensive, which can reduce spending and slow down inflation.

If the Fed Believes That Inflation Is a Problem,it Will