If businesses are producing at capacity,and the nation is experiencing almost full employment a very low rate of unemployment - less than 2%),the Fed may decide to:
A)Lower interest rates.
B)Raise taxes.
C)Lower taxes.
D)Increase interest rates.

Question

Quizplus · Accepted Answer

When the economy is at full capacity and experiencing almost full employment, there is a risk of inflation if demand continues to grow. To counteract this, the Fed may decide to increase interest rates to slow down borrowing and spending, which can help to prevent inflation from spiraling out of control.

If Businesses Are Producing at Capacity,and the Nation Is Experiencing