What was a consequence of the Federal Reserve Board's 1981 decision to tighten the money supply?
A) The inflation rate increased.
B) Interest rates began a slow but steady decline.
C) Economic activity declined and the unemployment rate increased.
D) Federal budget deficits were brought under control.

Question

Quizplus · Accepted Answer

When the Federal Reserve Board tightened the money supply in 1981, economic activity declined as it became harder for businesses and consumers to borrow money. This led to an increase in the unemployment rate.

What Was a Consequence of the Federal Reserve Board's 1981